HHS Deems Some Health Insurance Premium Hikes "Unreasonable"





The Dept. of Health and Human Services (HHS) announced in a news release today that health insurance premium increases in nine states have been deemed “unreasonable” under the rate review authority granted by the Affordable Care Act.”  Those states are Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska, Virginia, Wisconsin, and Wyoming.

One example of an “unreasonable” finding was the John Alden Life Insurance Company, which sought a 13% rate increase for its small group medical insurance product.

HHS has created a system of accountability backed by raw numbers to illustrate the decision making process by requiring insurance companies to submit proposals to HHS with reasoning and explanation for rate increases of 10% and higher.  The proposals are then reviewed and, in the spirit of transparency, available online with an easy to use state-by-state search format.

From the release:

“This initiative is one of many in the health care law to ensure that insurance companies play by the rules, prohibiting them from dropping coverage when a person gets sick, billing consumers into bankruptcy through annual or lifetime limits, and, soon, discriminating against anyone with a pre-existing condition.”

This oversight creates downward pressure on costs and rate adjustments among insurance companies, which cite factors such as increased claim costs, and increased administrative costs.  Group Health, in its pending request for a 23% increase in its Group Health Options product, cited “volatility associated with the prediction of future claims.”

In some of the “reasonable” cases, modifications lowering requests by as little as .08% have been made by HHS, demonstrating attention to even small rate changes.

For more comprehensive information, details and updates were provided online today by HHS in a rather straightforward Progress Report.