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Affordable Care Act holding insurers accountable for premium hikes

Affordable Care Act holding insurers accountable for premium hikes

Tuesday, January 17, 2012

Affordable Care Act holding insurers accountable for premium hikes
A report by Wyoming PBS News partner, Wyoming Business Report
By Business Report Staff

WASHINGTON, D.C. — Health insurance premium increases in five states have been deemed "unreasonable" by the U.S. Department of Health and Human Services, HHS Secretary Kathleen Sebelius announced this week.

After independent expert review, HHS determined that Trustmark Life Insurance Co. has proposed unreasonable health insurance premium increases in Wyoming and four other states — Alabama, Arizona, Pennsylvania and Virginia. The excessive rate hikes would affect nearly 10,000 residents across these five states.

To make these determinations, HHS used its "rate review" authority from the Affordable Care Act (the health care law of 2010) to determine whether premium increases of over 10 percent are reasonable.

"Before the Affordable Care Act, consumers were in the dark about their health insurance premiums because there was no nationwide transparency or accountability," said Sebelius. "Now, insurance companies are required to disclose rate increases over 10 percent and justify these increases. It's time for Trustmark to immediately rescind the rates, issue refunds to consumers or publicly explain their refusal to do so."

In the five states, Trustmark has raised rates by up to 13 percent. In Wyoming, Trustmark’s requested rate increase was 11.80 percent. To see all the insurance companies and their requested rate increases in Wyoming, go to http://companyprofiles.healthcare.gov/states/WY/rate_reviews?search_method=rate_reviews.

In addition to the review of rate increases, many states have the authority to reject unreasonable premium increases. Since the passage of the health care reform law, the number of states with this authority increased from 30 to 37, with several states extending existing "prior authority" to new markets.

Last week, a report showed that health care spending has grown at remarkably low rates. According to an analysis done each year by the Centers for Medicare & Medicaid Services, U.S. health care spending experienced historically low rates of growth in 2009 and 2010. A recent study released by Mercer Consulting also showed a slowdown in the average employee health benefit cost to businesses.

The Affordable Care Act encompasses several policies, including rate review, to continue this slow growth. By fighting fraud, better coordinating care, preventing disease and illness before they happen and creating a new state-based insurance marketplace, it helps keep health care cost growth low.

For general information about rate review, visit: http://www.healthcare.gov/law/features/costs/rate-review/

Wyoming Business Report