HHS To Issue Definition of ‘Unreasonable’ Health Care Premium Increases
Insurance industry officials and state regulators are anticipating guidance soon from HHS Secretary Kathleen Sebelius on how the agency will define "unreasonable" premium increase requests under a provision in the federal health reform law that gives states more power to review rate hikes, CQ HealthBeat reports (Norman, CQ HealthBeat, 12/10).
Details of Regulatory Powers
In August, HHS announced grants totaling $46 million for 45 states and Washington, D.C., to help improve and expand their ability to enforce new health insurance industry regulations included in the overhaul.
The $1 million grants are the first phase in a five-year, $250 million initiative under the overhaul to help states implement the new regulations, as well as consumer safeguards that would enable states to require pre-approval of proposed premium rates hikes (California Healthline, 8/17).
The health reform law provision requires insurers that call for unreasonable rate increases to provide detailed explanations and financial information to state and federal governments and consumers. The information also must be posted to the insurer's website.
HHS Considers Options
HHS is considering what information to include. According to CQ HealthBeat, the requirements could include information that insurers previously have not been required to share with the public.
Health insurers are eagerly anticipating the new rules, as are state regulators. Each state could be affected differently because state laws vary on how much regulators control premium increases, ranging from no control to prior approval of any proposed hikes.
Groups Weigh In on Regulation
Groups on both sides of the issue have expressed their opinions on what HHS should do, CQ HealthBeat reports.
Karen Ignagni, CEO of America's Health Insurance Plans, said HHS should consider the underlying factors that raise health care costs and premiums, such as hospital costs.
Meanwhile, consumer groups are asking Sebelius to set the bar low for what is considered unreasonable. They argue that unreasonable should be classified as any increases that are greater than 10%, higher than the annual increases in the medical Consumer Price Index or if the insurer was forced to issue rebates under medical-loss ratio rules (CQ HealthBeat, 12/10).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.