Federal officials ready to debate health insurance rate increase of 10% or more

Health InsuranceU.S. officials are getting ready to debate whether or not increases in the rates for health insurance of 10 percent or more were excessive within seven states which have rate review processes that have been labeled ineffective. 

The rate review systems for Louisiana, Alabama, Montana, Arizona, Wyoming, Idaho, Missouri, as well as four territories have been deemed to be insufficient by the Center for Consumer Information and Insurance Oversight (CCIIO). The CCIIO is a branch of the Centers for Medicare and Medicaid Services.  

According to the CCIIO, federal officials, under the regulations for final rate reviewing of the Affordable Care Act’s authority, will be performing the reviews themselves until the time comes that “those areas are able to strengthen their review processes and authorities.” 

It has also stated that three other state review programs have been labeled partially effective: Pennsylvania, Iowa, and Virginia. 

According to Jim Donelon, the Louisiana insurance commissioner, that state intends to bring about legislation that will create an insurance rate review structure that will be sufficient to make it unnecessary for the federal officials to take part.  That said, he explained that he was not surprised by the designation the CCIIO gave their current review authorities and processes.  He explained that “Historically, we have not had prior approval of rates at all.” 

Regulations for rate reviews, which were completed in May 2011 and will be effective as of September 1, state that independent experts must be used to review any rate increase proposals of 10 percent or more for the majority of small group or individual health insurance plans.  State regulators will be responsible for those reviews. 

In the case that the states either decline to take on this task or do not have the necessary resources to adequately perform the reviews, federal officials have been given the authority to take on the state review responsibilities.

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