HHS takes over rate reviews in 10 states

The Department of Health & Human Services (HHS) will be reviewing health insurer requests to raise premiums in 10 states that aren't adequately policing rates.

Insurers looking to raise health premium rates by at least 10 percent must justify the proposed increase beginning Sept. 1. State regulators then have the authority to determine whether the increases are reasonable. However, if the federal government deems a state's rate review program inadequate, it can step in to perform the reviews, reports Investment News.

Seven states--Alabama, Arizona, Idaho, Louisiana, Missouri, Montana and Wyoming--lack proper resources or authority in both the individual and small group markets; while three states--Iowa, Pennsylvania and Virginia--are lacking only in the small group markets, according to data from the agency's Center for Consumer Information and Insurance Oversight (CCIIO).

The rate review regulation requires independent experts to examine 12 factors to determine whether an increase of more than 10 percent is "reasonable," including changes in medical cost trend changes, utilization of services, benefits, enrollee risk profile, cost-sharing; impact on rates of over- or under-estimate of medical trends in previous years; reserve needs; administrative costs related to programs that improve healthcare quality; medical-loss ratio; and the health plan's risk-based capital status relative to national standards, The Hill's Healthwatch notes.

AHIP protested the move by HHS to review rates in the 10 states. "Review of premiums should continue to be done at the state level because states have the experience, infrastructure and local market knowledge to best regulate health insurance," said AHIP spokesman Robert Zirkelbach, notes Investment News.

To learn more:
- here's the CCIO fact sheet
- read the Investment News story
- check out The Hill's Healthwatch piece

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