Can bad publicity lower premiums?

As of Thursday, the spotlight is on insurers that want to raise their rates by 10 percent or more as the Department of Health & Human Services (HHS) began its federal oversight of the rate increase process.

"Experts will closely examine information about the underlying cost trends in healthcare to flag instances when insurance companies are unjustly raising costs," HHS officials said. However, since HHS still lacks the authority to actually do anything about rate hikes deemed unjustified, they are hoping that public disclosure of large increases will simply discourage insurers from implementing them, reports the Wall Street Journal.

"In theory, yes, they can proceed if they find it to be unreasonable," said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at HHS. "But the fact of the matter is it has a deterrent effect for carriers to move forward with an unreasonable rate increase."

Industry officials say that by posting large premium hikes online, HHS is engaging in a "shaming process." America's Health Insurance Plans warned that "politicizing" the rate review process undermines plan's financial health," the WSJ notes.

Either way, consumers can check out all health plan proposals to increase their premiums through an HHS-run website starting mid September, reports the National Underwriter. HHS will publish a summary of the factors driving rate hikes and explanations insurers provided for the proposed increase. The website also allows consumers to comment on large proposed rate increases.

To learn more:
- check out the Wall Street Journal article
- read the National Underwriter article
- visit the HHS Healthcare.gov website

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