HHS rule says insurers must justify double-digit rate increases

Despite opposition from insurers, the Department of Health and Human Services finalized a rule stipulating that health insurance premium increases greater than 10 percent will trigger extra regulatory scrutiny.

The New York Times: Insurers Told To Justify Rate Increases Over 10 Percent
Kathleen Sebelius, the secretary of health and human services, issued a final rule establishing procedures for federal and state insurance experts to scrutinize premiums. Insurers, she said, will have to justify rate increases in an environment in which they are doing well financially, with profits exceeding the expectations of many Wall Street analysts. ... Federal health officials proposed the 10 percent threshold in December. The insurance industry criticized it as an arbitrary test that could brand a majority of rate increases as presumptively unreasonable. But the administration rejected the criticism and insisted on the 10 percent standard in the final rule, issued Thursday. (Pear, 5/19).

Los Angeles Times: Health Insurers Must Soon Justify 10%-Plus Premium Hikes
Health insurers will be required to justify annual premium increases of 10 percent or more to state regulators starting in September under a new rule issued by the Obama administration. Federal officials, pointing out that the average cost of health insurance has more than doubled over the last decade, said the effort would help states curb unreasonable rate proposals for millions of individual insurance buyers and small businesses (Helfand, 5/20).

The Wall Street Journal: Health Premium Increases To Face New Scrutiny
The requirement is part of President Barack Obama's 2010 health overhaul law. Congressional Democrats initially wanted to give the federal government the power to block carriers from what it considered unjustified rate increases in order to combat double-digit increases in consumers' premiums. But the provision as passed left the regulation up to states. The final regulation calls for states to examine rate hikes that hit or exceed 10 percent and gives states more tools to do so (Adamy, 5/20).

Kaiser Health News: Health Insurance Rate Hikes Face Tougher Scrutiny
Health insurers seeking rate increases of 10 percent or more will face increased scrutiny starting in September under rules finalized Thursday by the Obama Administration. States - or in some cases the federal government - will review the flagged premium increases and insurers will have to justify increases deemed unreasonable. The law does not give the federal government power to reject increases, but many state regulators have that authority (Appleby, 5/19).

Bloomberg: Health Insurers Lose Push To Ease Rule On U.S. Overhaul Law's Price Review
U.S. insurers led by WellPoint Inc. (WLP) and UnitedHealth Group Inc. (UNH) failed to get federal regulators to change a rule in the 2010 health care overhaul that triggers a review of any premium increases exceeding 10 percent. The ruling takes effect this year and adds pressure on insurers to justify price increases. The health insurance industry's Washington lobbying group, America's Health Insurance Plans, had asked the government to do away with the 10 percent rate review threshold, calling it flawed. The rules were prompted partly by a proposal from the California subsidiary of Indianapolis-based WellPoint to raise rates as much as 39 percent in 2010 (Armstrong, 5/19).

Politico Pro: Insurers Don't Like Rate Review Reg
Groups are starting to weigh in on new rate review regulations finalized by the Obama administration late Thursday morning. America's Health Insurance Plans took HHS to task for instituting a strict 10 percent threshold for triggering review. CEO Karen Ignagni had this to say: "Focusing on health insurance premiums while ignoring underlying medical cost drivers will not make health care coverage more affordable for families and employers. The public policy discussion needs to be enlarged to focus on the soaring cost of medical care that threatens our economic competitiveness, our public safety net and the affordability of health care coverage" (Millman, 5/19).

Dow Jones Newswire/Fox News: US Government To Require Review Of Big Health Insurance Rate Hikes
The Department of Health and Human Services said the rule, arising from the health overhaul law, will moderate premium increases by bringing more transparency to the rate-setting process. Starting Sept. 1, independent experts must examine any proposed increase of 10% or more for most individual and small-group plans, with states generally bearing the responsibility for rate reviews and HHS serving as backup for states lacking adequate resources (Wisenberg Brin, 5/19).