HHS Rule Not Expected To Boost State Oversight of Health Plan Rates
A newly released federal rule on health insurance rate oversight is expected to have little effect on California, California Watch reports.
Last week, HHS issued a final rule requiring insurers to justify proposed rate increases of more than 10% for individual and small-group plans. The rule allows states to examine the calculations and rationale used to determine a need for rate hikes (Jewett, California Watch, 5/23).
The HHS rule stems from a provision in the reform law that requires annual reviews of "unreasonable increases in premiums" to ensure that "consumers get value for their dollars."
The rule will take effect in September 2011 (California Healthline, 5/20).
Limited Effect on California
Policymakers and experts say the HHS rule will have little effect on California because state legislation (SB 1163) that took effect earlier this year includes similar provisions. The state law requires insurers to:
- Provide regulators with a 60-day notice of rate hikes;
- Submit planned premium increases for actuarial review.
Assembly member Mike Feuer (D-Los Angeles) said the new HHS rule will not have a strong effect on California because it does not authorize states to reject premium increases.
Push for Greater Rate Regulation
In related news, Feuer has authored a bill (AB 52) that would require insures to seek prior approval from state regulators for proposed increases in health insurance premiums or copayments. The legislation also would authorize state regulators to reject rate hikes deemed "excessive, inadequate or discriminatory."
The Assembly Committee on Appropriations is slated to vote on Feuer's bill on Friday (California Watch, 5/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.