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Courtesy Jose Borjon,

Rules will help lower health insurance costs and bring transparency to process

Washington, D.C. – Congressman Henry Cuellar (TX-28) announced that starting today health insurers seeking to increase their rates by 10 percent or more must submit their request to state or federal reviewers to determine whether the increase is reasonable.

This review program was created by the Affordable Care Act and will bring greater transparency, accountability, and, in many cases, lower costs for families and small business owners who struggle to afford coverage.

In many states, federal agencies now have the authority to deny or reduce rate hikes found to be excessive.  Insurers that insist on going ahead with double-digit rate increases are required to post their justifications on their website, and state and federal agencies will post them as well.

“The American people, especially those living in the 28th District of Texas, for too long have had to deal with burdensome and expensive health insurance because companies have not been reviewed and regulated thoroughly in the past,” Congressman Cuellar said. “Today marks the beginning of a new era of reasonable health care insurance costs that our American families can afford.”

Starting today, insurers proposing double digit increases will have to provide clear information that indicates what factors are causing proposed increases.  Reviewers and experts in the field of health insurance will closely examine information about the underlying cost trends in health care to flag instances when insurance companies are unjustly raising costs. 

“As of today, consumers will no longer have to take the word of their insurance company when dealing with costs of health insurance,” Congressman Cuellar said. “American families and those that most need health insurance will have an independent expert reviewing their proposed rate increase—at all time.”

Starting in mid-September, consumers in every state can go to www.HealthCare.gov to view easy-to-access, consumer-friendly disclosure information explaining proposed increases that are 10 percent or higher than last year’s rates. Consumers will see a summary of the key factors driving rate increases and an explanation provided by insurance companies for why the proposed increase is needed. Also, for the first time, consumers in every state will be given the ability to comment on large proposed rate increases. 

States continue to have the primary responsibility for reviewing insurance rates.  Because many states have lacked the resources needed to perform strong rate review, the Affordable Care Act provides $250 million in Health Insurance Premium Review Grants to states over five years. These new resources will improve how states review proposed health insurance rate increases and hold insurance companies accountable for unjustified premium increases.

For more information on rate review and today’s announcement, please visit: http://www.healthcare.gov/news/factsheets/ratereview09012011a.html

For more information on significant state achievements with rate review, please visit: http://www.healthcare.gov/news/factsheets/ratereview09012011b.html