Reform Alert - News from the Blues' Office of National Health Reform

Michigan rate review process deemed effective

July 21, 2011

Under the Affordable Care Act and regulations issued by the Center for Consumer Information and Insurance Oversight (CCIIO), as of Sept. 1, 2011, any insurance rate increase of 10 percent or more must go through a review process to determine if the increase is unreasonable. Rate reviews can be conducted by the states, but not all states have what is deemed by CCIIO as an "effective review process." 

If CCIIO determines that a state has an "effective rate review program" that includes certain disclosure and transparency requirements, then CCIIO will adopt a state's determination of whether a rate increase is "unreasonable." If a state is deemed not to have an effective program, rate increases that exceed the federal threshold will be reviewed by CCIIO to determine if the rate increase is "unreasonable." Michigan's review process has been deemed effective. 

On July 6, CCIIO released a list of states with review processes deemed "effective," but this determination can be re-evaluated as changes are made in each state. 

As of July 1, 2011: 

  • 43 states, the District of Columbia and one U.S. territory have effective rate review in at least one insurance market (includes Michigan) 
  • 40 states, the District of Columbia and the U.S. Virgin Islands have effective review for all insurance markets and issuers (includes Michigan) 
  • In three states, the federal government will partner with the state to conduct reviews 
  • In seven states and four U.S. territories, the federal government will conduct reviews

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.