HHS Issues Final Regs on Premium Increase Reviews

“Combined with other important protections from the Affordable Care Act, these new rules will help lower insurance costs by moderating premium hikes and provide consumers with greater value for their premium dollar,” HHS said in a press release. In 2011, this will mean rate increases of 10% or more must be reviewed by state or federal officials.  

Starting September 1, 2011, the rule requires independent experts to scrutinize any proposed increase of 10% for most individual and small group health insurance plans. States will have the primary responsibility for reviewing rate increases. While most states will take on this responsibility, HHS will serve in a backup role in states that don’t have the resources or authority to review rates.   

HHS said it has awarded $44 million in Affordable Care Act grants to states to help strengthen their oversight capabilities. An additional $200 million will continue to be available to states under the Act.  

Starting September 2012, the 10% threshold will be replaced by state-specific thresholds that reflect the insurance and health care cost trends in each state. The final rule clarifies that HHS will work with states in developing these thresholds.  

The rule requires insurance companies to provide consumers with easy to understand information about the reasons for unreasonable rate increases and post the justification for those hikes on their Web site as well as on the HHS Affordable Care Act Web site, http://www.healthcare.gov.