Health Reform Rate Review Rules Keep Too Much Data Secret to Prevent Unreasonable Rate Hikes, Says Consumer Watchdog

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Washington, DC – Final health reform regulations issued today by the Obama administration fail to require health insurance companies to make enough information public to prevent unreasonable rate increases, said Consumer Watchdog.
The regulation issued by HHS requires review of any health insurance rate increase of 10% or greater, and a public justification of those increases. In some cases insurers will have to publicly explain all the predictions and actuarial assumptions they make to determine a rate, giving consumers the ability to question those assumptions. However in many cases the rule allows states to choose how much or how little information from a rate filing to make public. By not requiring full transparency of the data insurers use to justify rate hikes, the rule does not allow the kind of public scrutiny necessary to pressure insurance companies into lowering unreasonable rates, said Consumer Watchdog.
“The health reform law relies on public disclosure of unreasonable rates to shame insurance companies into charging consumers fairer prices, but that’s an empty threat if health insurers don’t have to explain every assumption in the full light of day,” said Carmen Balber, Washington director for Consumer Watchdog. "This rule doesn’t go far enough to protect consumers from unreasonable rate increases.”
Consumer Watchdog noted that the regulation does not require approval of all health insurance rates before they take effect, and said state regulators ultimately need the authority to reject excessive rate increases to protect consumers from spiraling prices and preserve affordability under health reform.
“We have learned the hard way that embarrassment isn’t always enough to make insurance companies do the right thing. Just last month, a California regulator found a 14% rate increase was unreasonable, but could do no more than ‘express disappointment’ that the insurance company implemented the rate. States must have the power to reject excessive rate increases. Otherwise, rate hike decisions will be made by insurance executives deciding that the extra profits generated by double-digit rate increases are worth a few days of bad publicity,” said Balber.
Consumer Watchdog’s recommendations to strengthen rate review under the regulation can be downloaded here:

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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

Carmen Balber
Carmen Balber
Consumer Watchdog executive director Carmen Balber has been with the organization for nearly two decades. She spent four years directing the group’s Washington, D.C. office where she advocated for key health insurance market reforms that were ultimately enacted into law as part of the Affordable Care Act.

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