HHS Deems Health Insurance Rate Hikes Excessive
March 23, 2012

HHS Deems Health Insurance Rate Hikes Excessive

Health insurance premium hikes in nine states have been deemed by Health and Human Services director Secretary Kathleen Sebelius to be unreasonable, as granted under the rate review authority given by the Affordable Care Act.

Sebelius said in a Thursday statement: “Thanks to the Affordable Care Act consumers are no longer in the dark about their health insurance premiums. Now, insurance companies are required to justify rate increases of 1-percent or higher. It´s time for these companies to immediately rescind these unreasonable rate hikes, issue refunds to consumers or publicly explain their refusal to do so.”

The secretary also issued a new report showing that consumers are already seeing decreasing insurance rate increases due to the new rate review program that took effect in 2011.
The report shows that fewer insurers have proposed fewer double-digit rate increases. The report states that in the last quarter of 2011 states reported a 4.5 percent drop in premium increases, in Nevada premiums actually declined.

The HHS determined that two companies proposed unreasonable insurance premium hikes in nine states Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska, Virginia, Wisconsin, and Wyoming. The rate hikes would have affected over 42,000 residents in these states.

According to the report states, such as Texas, Kentucky, Nevada and Indians,  are showing fewer requests for increases greater than 10 percent. While California, New York, Oregon and others have aggressively lowered rate increases for their residents.

The HHS notes that this provision in the Affordable Care Act is to help consumers by protecting them from being dropped when they become sick, being billed into bankruptcy or being discriminated against with a pre-existing condition.

Information on the specific determinations is available at: http://companyprofiles.healthcare.gov/

The rate review report is available at: http://www.healthcare.gov/law/resources/reports/rate-review03222012a.html

General information about rate review is available at: http://www.healthcare.gov/law/features/costs/rate-review/