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

Rate increases meeting threshold subject to government review

UPDATED: May 26, 2011

Original: April 7, 2011

The Department of Health and Human Services has released the final rate review regulation governing non-grandfathered individual and small group policies. The final rule has several additions to the December 2010 proposed rule.

Starting with rates filed Sept. 1, 2011 (or for States which do not require filing, for rates effective on or after Sept. 11, 2011), insurers seeking rate increases of 10 percent or more are required to publicly disclose the proposed increases and the justification for them. Such increases will be subject to state or federal review to determine whether they are unreasonable. States with effective rate review systems will conduct the reviews and must meet certain requirements set forth by HHS, which will decide by July 1 whether states are qualified to conduct the reviews.

Starting Sept. 1, 2012, the 10 percent threshold will be replaced with a state-specific threshold jointly developed by HHS and individual states.

An easy-to-understand form explaining the proposed increases will also be made publicly available. To strengthen consumer transparency, states must also provide an opportunity for public comments.

HHS does not have the right to deny rate increases under this regulation, only the right to review increases and determine what is reasonable or unreasonable.

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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.