Report: Inconsistency Exists Among States’ Insurance Rate Reviews

Although the federal health reform law gives state officials the power to review and reject what they consider to be unreasonable increases to health insurance premiums, many states inconsistently enforce the provision, according to a recent Kaiser Family Foundation study, Reuters reports.

KFF researchers found that giving states power to review premium increases "does not necessarily protect consumers from large rate increases."

In addition, the researchers noted that "the rigor and thoroughness that states bring to rate review can vary widely, depending on motivation, resources and staff capacity."

Issues that are inhibiting states' ability to review premium increases include:

• A lack of trained actuaries to review all filed insurance rates;
• Statutes that apply only to certain insurers, leaving some states unable to review all insurance companies;
• Rules that stipulate that some insurers do not have to publicly disclose their rate filings; and
• Subjective standards governing insurers that make additional authority seem arbitrary.

KFF researchers also noted that no state includes policyholders in the process through which insurers and state regulators discuss and review premium rates.

The researchers recommended that states pass regulations that explicitly govern processes for reviewing insurance rate requests (Lambert, Reuters, 12/2).