Health Insurance Rates - New Law Helps Ensure Premiums Are Not Increased Unjustly

The U.S. Department of Health and Human Services’ (HHS) most recent Affordable Care Act statute intends to bring new transparency and integrity to any health insurance rate hikes. This new law permits HHS to coordinate with states to force insurers to justify with evidence any planned rate increases.

Insurance premiums have skyrocketed the last decade putting ever increasing pressure on working families and businesses. For example, average rates for family coverage have ballooned 131% since 1999.

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

Under the proposed new Act, insurers in all 50 states will have to explain increases of 10% or more in a public manner beginning in 2011. Beyond 2011, upper limits would be imposed by the states themselves that would take into consideration local trends and data to gauge a fair, equitable insurance rate. These rate increases would be posted online at www.HealthCare.gov, as well as the insurer’s own website.

“The proposed rate review policy will empower consumers, promote competition, encourage insurers to do more to control health care costs and discourage insurers from charging premiums which are unjustified,” said Jay Angoff, director of HHS’ Office of Consumer Information and Insurance Oversight.

By 2014, the Affordable Care Act will give the states power to essentially ban any health plan that consistently shows a history of excessive, abusive rate increases.