The White House Plans to Review Health Insurance Rates in 10 States
Federal Takeover of Review Procedures to Begin Sept. 1
Federal and state officials will scrutinize proposed health insurance rate increases of more than 10 percent to decide whether they are justified. This new ability to govern rates and determine those that are unreasonable will be a major protection for consumers under the health care reform law.
Many health insurance companies have been pushing for major hikes over the past few years. In particular, Blue Shield of California is known for announcing plans to increase rates by 59 percent. While the company later decided not to administer the increase, the idea that government could not step in and stop the company was troubling to state regulators.
To solve the problem for states that have no effective rate review programs for individual or small-group health insurance, the government plans to step in and handle the reviews for them. States include Alabama, Arizona, Idaho, Louisiana, Missouri, Montana and Wyoming.
In three additional statesIowa, Pennsylvania and Virginiathe government will review proposed increases while allowing states to review individual rates.
Some States Protest Takeover, Others Agree with Decision
Several states have responded to the takeover. Iowa has protested the federal decision and asked the administration to reconsider. However, other states, Louisiana in particular, have acknowledged that they lack power under state law to review rates and need help.
Louisiana Insurance Commissioner James J. Donelon told the New York Times I cannot quarrel with the federal finding. We do not have any authority to regulate health insurance rates under Louisiana law.
California recently was given the authority reject health insurance rate hikes after a long battle fight by Insurance Commissioner Dave Jones to acquire some power.
Montana Commissioner Monica J. Lindeen is hoping for the same rights. A similar bill to grant her access to reviewing power died in the Legislature. She said she would seek such authority again to avoid having the federal government judge what is reasonable for the state.
The government has given the 10 chosen states the right to review their own rates. However, the only way theyll be able to do so is by posting information about proposed rate increases on a public website, which is something many states are unlikely to do.
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