Rate Review will Apply to Insurance Policies Sold Through Associations

On September 1, 2011, the Department of Health and Human Services (HHS) released an amendment to the rate review provisions of the Patient Protection and Affordable Care Act (PPACA). The amendment extends the rate review process to coverage sold to individuals and small groups through associations effective November 1, 2011. No other changes to the current rate review process were announced.

The rate review process under PPACA went into effect on July 1, 2011. Rate review applies to increases of 10% or more for non-grandfathered individual and small group products (not individual policies). States that have “effective” rate review programs provide the review, while for states identified as having “ineffective” rate review, HHS may review rate increases.

Insurers requesting rate increases of more than 10% are now required to post an explanation of the increase on their website. Beginning in mid-September, consumers will be able to go to HealthCare.gov to view information explaining proposed increases of 10% or more. Consumers will see a summary of the key factors driving rate increases and an explanation provided by the insurance company for why the proposed increase is needed.

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

For state-by-state information on rate review, visit: http://www.healthcare.gov/news/factsheets/ratereview09012011b.html