The Affordable Care Act creates a Rate Review program in your state to help protect individuals and small businesses from unreasonable health insurance rate increases. Starting on September 1, 2011, health insurers must justify any rate increase of 10% or more before the increase takes effect.
Review of Insurance Rate Increases and the Affordable Care Act
Insurance companies must now justify proposed rate increases for your health insurance. Director of Consumer Information and Insurance Oversight at HHS, Steve Larsen, explains this important feature of the health care law.
What This Means for You
- Your insurance company can’t raise rates by 10% or more without first explaining its reasons to your state or federal Rate Review program. All explanations will be posted on HealthCare.gov and your Rate Review program will give you a chance to comment on them.
- Your Rate Review program will determine if the rate increase is unreasonable. A rate hike is unreasonable if, for example:
- It is based on faulty assumptions or unsubstantiated trends.
- It charges different prices to people who pose similar risks to the insurer.
- Your state regulator can approve or reject an unreasonable or excessive rate increase, if your state laws give the regulator this authority.
Some Important Details
- The Rate Review rules apply to new plans in the individual and small group markets. (If you are in a health plan that existed on March 23, 2010, your plan may be a grandfathered plan, which is exempt from the Rate Review rules.)
- Starting September 1, 2012, each state may have its own minimum premium increase that requires a review, based on the state’s unique premium trends, health care cost trends, and other factors.
- If your state doesn’t have a Rate Review program, or has a Rate Review program that is ineffective, the federal government will conduct Rate Reviews in your state.
For More Information
- Use HealthCare.gov’s Rate Review tool.
- See if your state has an effective rate review program.
- Rate Review Grant Map: See Health Insurance Premium Review grants in your state.
- Find detailed technical and regulatory information on rate review.
- HealthCare Blog: Protecting Consumers from Unreasonable Rate Increases.
- Fact Sheet: Review of Health Insurance Rate Increases.
- Patient's Bill of Rights: Learn about other consumer protections in the health care law.
Posted on: September 1, 2011
Last updated: May 16, 2012