Review of Premium Increases

(Note : For the next few weeks, Health Reform Talk will focus on detailed explanations for specific provisions in the new health reform law.)

So what’s included in Sec. 1003 of the Affordable Care Act, concerning unreasonable premium increases?

The Secretary of Health and Human Services (HHS), in conjunction with the states, must establish an annual review process, beginning with the 2010 plan year that will require insurers to submit a justification for any “unreasonable” premium increases prior to implementation. Insurers also will be required to “prominently” post information regarding premium increases on their Web sites.

The HHS will establish a program of grants available to the states to assist them with carrying out the review process. The review process will require a state, through its Commissioner of Insurance, to provide the HHS with information about trends in premium increases in health insurance coverage in premium rating areas in the state and to make recommendations, as appropriate, about whether particular health insurance issuers should be excluded from participation in the state’s Exchange based on a pattern of excessive or unjustified premium increases.

Beginning with the 2014 plan year, the HHS, in conjunction with the states, will be required to monitor premium increases of health insurance coverage offered both inside the Exchange and outside of the Exchange.

Effective date. The provision took effect on the date of enactment.

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