On May 19, the U.S. Department of Health and Human Services (HHS) issued its final regulation expanding federal oversight of health insurance rate increases. Starting September 1, 2011, all proposed rate increases of 10% or more by individual and small group health insurance plans must be independently reviewed. Insurers must also publicly disclose and justify the proposed increase. States will have the primary responsibility for reviewing rate increases, but HHS will conduct the review for states that do not have the resources or authority to do so. After September 2012, the 10% threshold will be replaced by state-specific thresholds that reflect each state’s insurance and health care cost trends.
The rule requires HHS to post rate review decisions, along with justification provided by insurance companies for those increases deemed unreasonable, on its website. Each insurance plan must also post its justification for a rate increase on its website. It also requires states to provide an opportunity for public input in the evaluation of proposed rate increases. HHS is also requesting public comment on applying the rule to individual and small group coverage sold through associations, which is sometimes exempt from state oversight.
Currently, 43 states, including Connecticut, have a rate review process. Some of these processes allow the state to block increases their regulators deem unjustified.
