Proposed ACA rule: Insurers face tighter rate review

The Department of Health and Human Services has proposed a new Affordable Care Act regulation to protect consumers from sky-high rate increases like the Anthem Blue Cross' 39 percent rate hike that sparked public outrage earlier this year and drew the attention of the feds.

The proposed regulations require insurers in all states to publicly justify any unreasonable rate increases beginning in 2011. Any proposed hikes of 10 percent or higher must be publicly disclosed and undergo thorough review to determine whether it is unreasonable, according to HHS.

"Year after year, insurance company profits soar, while Americans pay more for less health care coverage," Secretary Sebelius said in a statement. "The Affordable Care Act is bringing unprecedented transparency and oversight to insurance premiums to help rein in the kind of excessive and unreasonable rate increases that have made insurance unaffordable for so many families."

After 2011, thresholds will vary by state and reflect cost trends specific to each state. In a departure from past practice, insurers' justifications for unreasonable increases must be posted on and the insurance plan's website.

The policy is designed to encourage insurers to do more to control healthcare costs and discourage them from charging premiums that are unjustified, said Jay Angoff, director of HHS' Office of Consumer Information and Insurance Oversight.

According to the proposed regulation, if a state lacks the resources or authority to do a thorough rate review, HHS will conduct them. Otherwise, the states will conduct the reviews. Beginning in 2014, states may exclude from the health insurance exchanges those health plans that display excessive or unjustified premium increases.

To learn more:
- read the HHS press release
- here's the HHS fact sheet on the proposed rate review regulation
- read the actual proposed regulation

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