The reform law's rate review program is working and, consequently, insurers are submitting and implementing smaller premium rate increases.
In 2011, rate increases that went into effect were about 20 percent lower than the rates insurers requested, either because the rate was modified by the state or the insurer, or the request was denied or withdrawn, according to a new Kaiser Family Foundation study. Insurers requested to hike rates by an average of 6.8 percent, but the actual rates approved increased on average by 5.4 percent.
And on a state-by-state basis, insurers in some states have felt the impact of the reform law's rate review more than others. Namely, rate reviews were most impactful in Iowa, Nevada, Oregon and South Carolina, all of which cut the average rate increase by at least 4 percentage points, LifeHealthPro reported.
However, reviews had little effect on rate increase requests in Georgia, Illinois, Minnesota, New Jersey, Ohio, South Dakota, Texas, Utah, Virginia, West Virginia, Wisconsin and the District of Columbia. In those states, insurers implemented rate hikes that were about the same as requested and no rate filings were lowered, rejected or withdrawn.
To learn more:
- here's the Kaiser study (.pdf)
- read the LifeHealthPro article