Exposing Unreasonable Health Insurance Premium Increases

September 1, 2011

One of the provisions of the Affordable Care Act (ACA) requires insurance companies to publicly disclose and explain rate increases that are defined as unreasonable. The ACA also made $250 million available to help states protect consumers from unreasonable rate hikes, and over the last nine months 45 states and the District of Columbia used $44 million in grants to improve their rate review oversight capabilities.

Starting today, September 1, 2011, those states with effective rate review systems will begin reviewing rate increases that have been proposed for 2012. In the few states that do not yet have an effective system, HSS will handle the rate reviews. If the new rate is 10% or higher “for non-grandfathered plans in the individual and small group markets” the insurer will have to publicly disclose the rate and post justification for the increase on its website.

As of August 15, 2011 43 states had effective review programs in place for both the small group and individual markets. This CMS Fact Sheet has more details and a complete list of the rate review program status in each state.

Additional Resources:

Implementation Timeline

Fact sheet

HHS news release

States with effective rate review programs

Visit Extend Health — the nation’s largest private Medicare exchange.

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