Forcing insurers to justify their rates…

Today, the U.S. Department of Health and Human Services released new regulations that require insurers to justify their rate increases. These proposed rules allow HHS to work with states to require insurers to publicly disclose and justify unreasonable rate increases.

On August 16, HHS awarded $46 million to 45 states and the District of Columbia to help them improve their oversight of proposed health insurance rate increases. This is part of $250 million that the health reform law makes available to states to take action against insurers seeking unreasonable rate hikes.

Later this year, the California Legislature passed and Governor Schwarzenegger signed SB1163, by Senator Mark Leno, to increase the authority of regulators to review rates, force insurers to justify their rates and make that information public. That state law goes into effect on January 1–and positions California to take advantage of the new regulations announced today.

In 2014, the Affordable Care Act empowers states to exclude health plans that show a pattern of excessive or unjustified premium increases from the new health insurance exchanges.

There’s more to do: Both Senator Dianne Feinstein at the federal level, and Assemblymember Dave Jones at the state level, proposed to give regulators full authority to approve and deny rates. While those efforts stalled, we continue to actively support those proposals, but today’s announcement is a good first step toward a more accountability and transparency for insurers.

Why does rate review matter. Secretary Sebelius went to the White House White Board to explain, and used California as an example:

For more information on the regulation, go to: http://www.healthcare.gov/news/factsheets/ratereview.html. For links to the regulation or other premium review information, go to: www.hhs.gov/ociio/initiative/index.html.

Health Access California promotes quality, affordable health care for all Californians.

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