FOR IMMEDIATE RELEASE
March 22, 2012
Contact: HHS Press Office
(202) 690-6343
Health insurance rate hikes in nine states deemed excessive by
HHS
Secretary Sebelius calls on
insurance companies to drop unreasonable rate
hikes
Health and Human Services (HHS) Secretary Kathleen Sebelius
announced today that health insurance premium increases in nine
states have been deemed gunreasonableh under the rate review
authority granted by the Affordable Care Act.
"Thanks to the Affordable Care Act consumers are no longer in the
dark about their health insurance premiums," said Secretary
Sebelius. "Now, insurance companies are required to justify
rate increases of 10 percent or higher. Itfs time for these
companies to immediately rescind these unreasonable rate hikes,
issue refunds to consumers or publicly explain their refusal to do
so."
Secretary Sebelius also released a new report today showing that,
six months after HHS began reviewing proposed health insurance rate
increases, consumers are already seeing results. Since the
rate review program took effect in 2011, health insurers have
proposed fewer double-digit rate increases. Furthermore, more states
have taken an active role in reducing rate increases, and consumers
in all states are getting straight answers from their insurance
companies when their rates are raised by 10 percent or more.
As of March 10, 2012, the justifications and analysis of 186
double-digit rate increases for plans covering 1.3 million people
have been posted at HealthCare.gov, resulting in a
decline in rate increases. According to the report, in the
last quarter of 2011 alone, states reported that premium increases
dropped by 4.5 percent, and in states like Nevada, premiums actually
declined.
In the decisions announced today, HHS determined, after
independent expert review, that two insurance companies have
proposed unreasonable health insurance premium increases in nine
states—Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska,
Virginia, Wisconsin, and Wyoming. The excessive rate hikes
would affect over 42,000 residents across these nine states.
In these nine states, the insurers have requested rate increases
as high as 24 percent. These increases were reviewed by independent
experts to determine whether they are reasonable. In this
case, HHS determined that the rate increases were unreasonable,
because the insurer would be spending a low percentage of premium
dollars on actual medical care and quality improvements, and because
the justifications were based on unreasonable assumptions.
Most rates are reviewed by states and many states have the
authority to reject unreasonable premium increases. Since the
passage of the health care law, the number of states with this
authority increased from 30 to 37, with several states extending
existing gprior authorityh to new markets.
The report released today shows that:
- States like Texas, Kentucky, Nevada and Indiana are reporting
fewer requests for rate increases over 10 percent.
- States like California, New York, Oregon, and many others,
have proactively lowered rate increases for their residents.
- The rate review program has made insurance companies explain
their increases, and more than 180 have been posted publicly and
are open for consumer comment on
companyprofiles.healthcare.gov.
This initiative is one of many in the health care law to ensure
that insurance companies play by the rules, prohibiting them from
dropping coverage when a person gets sick, billing consumers into
bankruptcy through annual or lifetime limits, and, soon,
discriminating against anyone with a pre-existing condition.
Information on the specific determinations made today is
available at: http://companyprofiles.healthcare.gov/
The rate review report released today is available at: http://www.healthcare.gov/law/resources/reports/rate-review03222012a.html
General information about rate review is available at: http://www.healthcare.gov/law/features/costs/rate-review/
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Note: All HHS press releases, fact sheets and other press
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Last revised: March 23,
2012
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