DHHS Issues Proposed Rule to Regulate Health Insurance Rate Increases

On December 21, 2010, the U.S. Department of Health and Human Services (DHHS) issued a proposed rule designed to attempt to regulate rate increases in the health insurance industry.  The thrust of the rule would require health insurers to justify rate increases of more than 10 percent a year beginning in 2011.  The proposed regulation would not give state or federal officials the ability to deny rate hikes. Instead, the federal government is relying on state regulators to scrutinize proposed rate increases and to assess whether they are justified by increases in the cost of care or other factors. Pursuant to the Affordable Care Act, DHHS has made grants to 46 states to help them increase oversight. However, if states do not have the capacity to review rates, DHHS would step in to conduct the review. Insurers whose rate increases are deemed unreasonable would be required to provide written justifications that would be posted at healthcare.gov, the federal government's new health Web site.  The implication of the proposed rule is that the added public display of large rate hikes will help persuade insurers to be more circumspect about the rates. After 2011, federal officials plan to develop new state-by-state criteria for assessing rate increases.   


About Sam Fish

Sam Fish has over 40 years of legal experience in federal and state human services laws and programs, having joined PCG in 1995 after serving as Chief Counsel, Region I, for the U.S. Department of Health and Human Services for more than 25 years. At PCG, Sam provides legal advice and counsel and has served on many projects that required legal research and interpretation and implementation of many federal and state laws.

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