SPOTLIGHT: State governors target premium rate reviews as Feds offer $1M per state

In New York, Gov. David Paterson signed into law legislation that restores--after a decade-long absence--the state's authority to stop health insurers from instituting what it considers to be unreasonably high rate hikes for the roughly 3 million New Yorkers who are either individual policyholders or enrolled in small-employer plans. Effective Oct. 1, insurers will have to submit rate requests to the state Insurance Department before raising premiums. The state then will have 60 days to decide whether to approve, modify or reject the request. The public will be able to comment on all rate applications, and insurers will have to provide consumers with 60 days notice of any rate increases. In addition, the law requires that insurers spend 82 percent of premiums on medical care for small-business and individual policyholders. In Pennsylvania, the state's Insurance Department is investigating to determine why "controversial" rate increases by health insurers in excess of 50 percent occurred--and the role played by the use of "questionable" health profiling tools (e.g., individualized medical questionnaires and drug profiling), or what is known as medical underwriting." FierceHealthPayer

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