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CCH® BENEFITS — 07/13/11

Rate Review In Ten States Will Rely On Federal Government Assistance

from Spencer’s Benefits Reports: The federal government will either conduct or assist health insurance rate reviews in ten states, according to most recent fact sheet from the Center for Consumer Information and Insurance Oversight (CCIIO), which discusses the rate review requirements included in the Patient Protection and Affordable Care Act.

According to the CCIIO, as of July 1, 2011, state rate review procedures were as follows:

• 43 states, the District of Columbia, and one U.S. territory have effective rate review in at least one insurance market;
• 40 states, the District of Columbia, and the U.S. Virgin Islands have effective review for all insurance markets and issuers.
• In three states (Virginia, Pennsylvania, and Iowa), the federal government will partner with the state to conduct reviews; and
• The federal government will conduct reviews in seven states (Wyoming, Montana, Missouri, Louisiana, Idaho, Arizona, and Alabama) and four U.S. territories (American Samoa, Guam, Northern Marianas Islands, and Puerto Rico) until those areas are able to strengthen their review processes and authorities.

The CCIIO fact sheet also noted that the following rate review activities have so far succeeded in reducing health insurance rate hikes:

• Rhode Island’s Insurance Commissioner used his rate review authority to reduce a proposed increase by a major insurer in that state from 7.9% to 1.9%.
• Californians were saved from rate increases totaling as high as 87% when scrutiny by the State Insurance Commissioner made a California insurer withdraw its proposed increase.
• Nearly 30,000 North Dakotans saw a proposed increase of 23.7% cut to 14% following a public outcry.
• Connecticut’s Insurance Department rejected a proposed 20% rate hike by one of the state’s major insurers.

Starting Sept. 1, 2011, insurers seeking rate increases of 10% or more for non-grandfathered plans in the individual and small group markets are required to publicly disclose the proposed increases and the justification for them.

For more information, visit http://cciio.cms.gov/resources/factsheets/rate_review_fact_sheet.html.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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