Texas Department of Insurance predicts rate hikes for 2013
Thousands of Texans are expected to see significant rate hikes for their health insurance coverage this year, largely due to the Affordable Care Act. The Texas Department of Insurance expects that more than 163,000 consumers throughout the state will see double-digit increases in their premiums due to the provisions of the federal health care law. The law does not go into full effect until 2014, but several of its provisions will be enacted this year in an effort to ease the transition to an overhauled health care system.
Rates could grow by as much as 36%
According to the agency, consumers are likely to see their rates rise anywhere from 10.6% to 36%. These rate hikes are expected to affect individuals and small businesses the most. Those that receive their health insurance coverage from a small business may find that their coverage disappears, if their employer decides to cut these benefits in an effort to stay afloat. The Texas Department of Insurance has expressed concern over this potential outcome.
Regulators lack authority
In Texas, many health insurance companies have free rein to raise rates as they see fit. In other states, insurance regulators have the authority to bar rate hikes if they are deemed unnecessary. The Texas Department of Insurance, however, does not have this power. The state is required by the Affordable Care Act to have a reasonable and efficient rate review process in place, but the state’s lack of authority has not yet risen any red flags with federal regulators.
Expanded authority may be bad for insurers
The Texas Department of Insurance has only the ability to warn consumers when regulators foresee rate increases on the horizon. Some state lawmakers are working on bills that would expand the authority of the state’s insurance regulators, but these efforts have yet to garner any significant traction. America’s Insurance Plans, an industry trade organization based in Washington D.C., suggests that such legislation would be bad for the insurance industry due to the negative stigma that current surrounds insurers. The group claims that regulators may be inclined to block rate hikes that are completely necessary just to win the affection of voters.