Rising health insurance rates have become a major issue in the U.S. For months, legislators from several states have been struggling with insurance companies in an effort to lower rates and stop steep rate hikes. Insurers argue that they must raise their rates – some going so far as to raise their rates by 40% — in order to stay competitive in the market. The soaring cost of medical procedures and care is one of the major contributors to rate increases, according to insurers.
The issue has gotten the attention of the federal government, who is now taking action.
On Thursday, the U.S. government issued a new ruling that calls for the review of all substantial health insurance rate increases effecting both individual and small group plans. The Department of Health and Human Services will be in charge of the reviews. The aim is for the government to have more authority over rate increases while also introducing more transparency to the nation’s insurance industry.
The ruling comes on the heels of some major health insurance companies reporting that they have experience the highest level of profit in years. The HHS has determined that these massive gains are due, in part, to medical costs growing slower than expected. The higher rates, however, are not an accurate reflection of this.
Insurers will be required to justify what the review classifies as “unreasonable” rate increases. These justifications will be open to public comment and will be posted on both the company’s website and the government website set up for the review.
