CMS Issues Proposed Disclosure Notices Insurers Would Use to Justify Rate Increases

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The Centers for Medicare & Medicaid Services March 7 published proposed consumer disclosure notices that insurers would be required to complete when proposing rate increases of more than 10 percent.

The disclosure notices then would be published on the Health and Human Services Department website while insurers' proposed increases are reviewed.

“The information reported by insurers would provide an unprecedented level of transparency in the health insurance market, promoting competition, encouraging insurers to do more to control health care costs, and discouraging insurers from charging rates that are unreasonable,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at CMS, said in a statement.

The disclosure notices are required by the Patient Protection and Affordable Care Act and go along with the premium rate review regulations that CMS issued in December 2010. Under the rate review regulations, insurers that seek to increase rates above a certain threshold would have to publicly disclose their proposal, which then would be reviewed to determine if the increase is unreasonable.

For the consumer disclosure notices, insurers would be required to provide a breakdown of their proposed increases along with an explanation of what they believe is driving the increase. Insurers also would be required to disclose how much of the increase would go to administrative costs and profits. More generally, consumers also could access information about insurance rate increases and the review process.

CMS March 1 published a notice in the Federal Register regarding its plan to collect the information and is seeking comment on the proposal (76 Fed. Reg. 11248). Comments are due by May 11.

The proposed notices are available at