Monday, February 28, 2011

Will Awareness Kill Contempt?

The Department of Health and Human Services (HHS) recently announced that nearly $200million in new grant funds are now available to help states develop programs that will make health insurance premiums more transparent and provide "the power to stop unreasonable premium increases from taking effect."

This new funding is in addition to the $46 million awarded in August of 2010 to 45 states and the District of Columbia to control premium hikes. It also complements new rules proposed in December of 2010 to require insurance companies to publicly justify unreasonable premium rate increases.

The new funding will help states with their premium rate review programs to ensure that proposed health insurance rate hikes are comprehensively reviewed and to provide greater transparency and openness to the rating process.

The HHS would determine that a state has an effective rate review program, if the state does the following:

 collects enough information from insurance companies to determine whether rate increases are unreasonable;
 dedicates enough resources to effectively review that information in a timely manner;
 analyzes the reasons insurance companies give for raising rates based on whether they are valid and reasonable; and
 has a legal definition for a reasonable or unreasonable rate increase.

This national effort is part of the Affordable Care Act, otherwise known as “health reform”, but how many Americans are aware of this new protection from unreasonable health insurance premiums?

For a comprehensive analysis of the Patient Protection and Affordable Care Act, including the full text of the law and additional information on health reform implementation and other recent developments in employee benefits, just click here.


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