HHS Issues Final Rules To Review Insurance Premium Increases

The Department of Health and Human Services (HHS) issued a final regulation to review large health insurance premium increases while at the same time providing consumers with clear access to this information.

HHS hopes that this transparency will help lower insurance costs, especially when in September 2011 state or federal agencies must review rate increases of 10-percent or more.

“Effective rate review works – it does so by protecting consumers from unreasonable rate increases and bringing needed transparency to the marketplace,” said HHS Secretary Kathleen Sebelius. “During the past year we have worked closely with states to strengthen their ability to review, revise or reject unreasonable rate hikes. This final rule helps build on that partnership to protect consumers.”

Starting September 1, 2011, the rule requires independent experts to review any proposed increase of 10-percent for most individual and small group health insurance plans. States will have the primary responsibility for oversight, and HHS will serve in a backup role if certain states are unable or unwilling to comply. Starting September 2012, the 10-percent threshold will be replaced by state-specific thresholds that reflect the insurance and health care cost trends in each state.

“Strong and transparent rate review processes are necessary to help bring down costs for consumers,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight. “Rate review will ensure that increases are based on reasonable estimates and real-time data on medical cost trends and health care utilization.”

For more information about recent trends in health insurance rates and the final rule, visit HERE.