Medical Plan Rate Increase Expected on Your Next Renewal?
Concerned about the increase your insurance carrier is preparing for your next medical plan renewal? Maybe the September 1, 2011 announcement by the Health and Human Services Committee will give you some comfort.
Health plan insurers who seek to increase their plan rates by ten percent or more are now required to submit their request to a government reviewer (“Regulator”), either state or federal, to determine whether the increase is “reasonable.” This new requirement is intended to bring transparency and accountability to the rating process in hopes of holding down some of the increases for families and business owners.
In some states, Regulators have the authority to deny or reduce rate hikes they find excessive. Insurers that insist on moving ahead with more than ten percent rate increases are required, for the first time in history, to post justifications for the increases on their websites. Regulators will also post the names insurers with plans that exceed a ten percent increase.
By mid-September, any individual should be able to go to HealthCare.gov to view disclosure information explaining why an insurer is proposing a rate increase in excess of ten percent. A summary of the key factors that drive the rate increase along with an explanation from the insurance company will be available. The plan must also allow consumers to comment on large proposed rate increases.
The federal government has provided $250 million to states resulting in 40 states contracting with actuaries for this review; 30 states adding staff; and 38 states improving information technology. HHS has made additional $200 million tax revenue available to states and territories to assist them or to conduct these rate reviews for them.