Arizona insurance companies are falling prey to federal insurance regulators as the Department of Health and Human Services (HHS) seizes control of the rate review process in the state. Last year, federal regulators began reviewing rates proposals from a company that sought approval for a 40% increase. Regulators decried this as one of the most unreasonable rate proposals they had seen since the passing of the Affordable Care Act and have vowed to fully investigate proposals coming from 32 other health insurance companies.
Federal regulators will be reviewing any proposal that seeks to raise health insurance rates by 10% or more. The Department of Health and Human Services took control of the state’s review process after deeming Arizona’s current system unreliable. Federal regulators do not have the authority to modify or reject these rate proposals, but state regulators have stated that they will adhere to the whims of the Department of Health and Human Services.
The HHS will begin posting information on the companies that are subject to review on its website and on the website for the state’s Department of Insurance. Federal regulators will examine whether the rate proposals coming from insurers are justified in the current economic climate. If they are not, this information will be passed to state regulators, who will again investigate the claim and determine whether it is approved or rejected.
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