HHS releases new report showing how rate review protects consumers
U.S. Department of Health and Human Services (HHS) Secretary Kathleen
Sebelius today announced Affordable Care Act grant awards of $3,979,002
to Tennessee that will help fight unreasonable premium increases and
protect consumers. Today, HHS also released a new report
entitled Rate Review Works detailing how previous rate review
grants are fighting premium hikes and helping make the health insurance
marketplace more transparent.
“We’re committed to fighting unreasonable premium increases and we know
rate review works,” said Secretary Sebelius. “States continue to have
the primary responsibility for reviewing insurance rates and these
grants give them more resources to hold insurance companies accountable.”
As of September 1, 2011, the Affordable Care Act requires health
insurers seeking to increase their rates by 10 percent or more in the
individual and small group market to submit their request to experts to
determine whether the rates are unreasonable. The Affordable Care Act
also requires insurance companies to publicly justify unreasonable
premium rate increases. These provisions will bring greater
transparency, accountability, and, in many cases, lower costs for
families and small business owners who struggle to afford coverage.
The Affordable Care Act provides States with $250 million in Health
Insurance Rate Review Grants, $48 million of which has previously been
awarded to 42 States, the District of Columbia and five territories. As
outlined in the new report, these grants and other State rate review
efforts are already making a difference in Tennessee. On May 30, 2011,
Governor Haslam signed into law a bill expanding the Department of
Insurance’s scope of review and prior approval authority to individual
and small group policies. The Department is currently working on
regulations to accompany its new approval authority.
As of July 1, 2011, all small group and individual health insurance
rates must be filed in advance for approval by the Commissioner.
Additionally, the Department is exploring ways to incorporate use of
Tennessee’s All Payer Claims Database to improve its rate review process.
The grants awarded today help to create a more level playing field by
improving how States review proposed health insurance rates and holding
insurance companies accountable for disclosing information about
unjustified rate increases.
Tennessee is proposing to use Cycle II grant funds in the following ways:
A summary of how each State will use the new resources can be found in
“The proposals from the States overwhelmingly demonstrate the need, and
desire, for new resources and tools to hold insurance companies
accountable,” said Steve Larsen, Director of the Center for Consumer
Information and Insurance Oversight. “Thanks to the Affordable Care Act,
States will have more of the tools they need to crack down on insurance
companies that want to pass unreasonable premium hikes on to hard
Information about significant State achievements with previous rate
review grants can also be found in the report.
Rate review builds on other provisions in the Affordable Care Act to
help make health insurance more affordable for individuals, families,
and businesses. Other steps the law takes to help make insurance more
The Affordable Care Act includes a variety of provisions designed to
promote accountability, affordability, quality, and accessibility in the
health care system for all Americans, and to make the health insurance
market more consumer-friendly and transparent. Some of the provisions
are already in effect, including prohibitions on pre-existing condition
exclusions for children; prohibitions on lifetime dollar limits in all
health plans; extended access to insurance for many young adults; and an
unprecedented level of transparency about health insurance through www.HealthCare.gov.
For the full Rate Review Works report, please visit: http://www.healthcare.gov/law/resources/reports/rate-review09202011a.pdf
For a fact sheet on the awards announced today, please visit: http://www.healthcare.gov/news/factsheets/2011/09/rate-review09202011a.html
Note: All HHS press releases, fact sheets and other press materials are
available at http://www.hhs.gov/news.
HHS Press Office202-690-6343
Source: U.S. Department of Health and Human Services (HHS)