A new report
on health insurance premium rate reviews in the states--implemented under the
Affordable Care Act--shows that consumers have saved an estimated $1 billion on
health insurance premiums since states began reviewing premium increase
The report, released by the Department of Health and Human Services Sept. 11,
looked at the impact of new rate review rules that prevent insurance companies
in all states from raising rates without accountability or transparency.
“The health care law is holding insurance companies accountable and saving
billions of dollars for families across the country," HHS Secretary Kathleen
Sebelius said in a press release. “Thanks to the law, our health care system is
more transparent and more competitive, and that's saving Americans real
Beginning Sept. 1, 2011, the ACA implemented federal rate review standards.
These rules ensure that, in every state, insurance companies are required to
publicly submit for review and justify their actions if they want to raise rates
by 10 percent or more, HHS said. To assist states in this effort, the ACA
provides them with Health Insurance Rate Review Grants to enhance their rate
review programs and bring greater transparency to the process. According to HHS,
42 states have used their rate review grant funds to make the rate review
process stronger and more transparent.
HHS Sept. 11 also touted $1.1 billion in savings to consumers from rebates
under the medical loss ratio provisions of ACA.
Forty-four states have programs to review the proposed increases; in a state
that does not have such a program, HHS reviews the proposed increases. All
explanations of the increases and the state's or HHS's decisions are made
available to the public on HHS's website at http://companyprofiles.healthcare.gov/.
According to the report, 2012 Annual Rate Review Report: Rate Review Saves
Estimated $1 Billion for Consumers, insurers proposing increases at or above
10 percent must submit for review clear information indicating the factors
contributing to the proposed increases.
To assist states in developing rate review programs at least as rigorous as
the federal standards set forth in ACA, the law established the Rate Review
Grants Program, a $250 million program providing states with funds to strengthen
and improve their rate review processes, monitor premium increases, and make
health insurance rates understandable for all consumers, HHS said.
To date, the Rate Review Grants Program has awarded $160 million in grants to
45 states, the District of Columbia, and several territories. States have
multiple opportunities to apply for a rate review grant, and HHS anticipates
making additional awards in 2012 and 2013.
Of the rate review determinations to date, according to the report, 50
percent have resulted in consumers receiving either a lower rate increase than
requested or no increase at all.
percent of submissions were withdrawn prior to determination, in part because
some insurers were not willing to have their proposed rate increase labeled as
made decisions on 69 percent of the proposed increases and HHS reviewed the
remaining 31 percent.
date, based on proposed rate filings at or above the 10 percent threshold, about
64 percent of determinations have been found to be unreasonable or have been
modified or withdrawn.
implemented rate increases were reduced on average by 2.8 percentage points.
Looking to the future, the report noted that in addition to the already
completed rate review enhancements, states continue to use grant funds to build
stronger rate review programs. Twenty-three states have been working to expand
the scope of their rate review authority and 39 states continue to work to
improve the quality and efficiency of their rate review programs. In the process
of making improvements, states used grant funds to create job positions for
actuarial, legal, and consumer support staff.
The rate review report is at http://www.healthcare.gov/law/resources/reports/rate-review09112012a.html.
Information on how states are using their rate review grant funds is at http://www.healthcare.gov/law/resources/reports/rate-review09202011a.pdf.
General information about rate reviews is at http://www.healthcare.gov/law/features/costs/rate-review/.