Federal and state agencies began reviewing Thursday health insurance rates to determine whether they comply with new rules under Obamacare.
Forty-one states will conduct their own reviews of individual and small-group-market insurers, but the federal Centers for Medicare and Medicaid Services (CMS) will review the rates in nine states that either lack the authority or do not have regulators to address rate increases.
Those states are Alabama, Arizona, Idaho, Louisiana, Missouri, Montana, Wyoming, Pennsylvania, and Virginia.
“These new rules combined with the funding states are receiving under the Affordable Care Act will trigger much closer scrutiny of health insurance rate hikes,” said DeAnn Friedholm, the director of the health reform campaign at Consumers Union. “But ultimately, it will be up to the states to protect consumers when rate increases are found to be unreasonable.”
Friedholm noted some states have the legal authority and resources to prevent unreasonable rates increases from taking effect. But she said there are states that have the authority but do not act aggressively enough “to prevent insurers from gouging consumers.”
The reviews will focus on insurers that have increased rates above 10 percent.
They will be asked to submit a “justification” for the hike, which will be posted on the CMS website. The insurers will also be required to post justifications for increases on their own websites for public review.
The power to deny or modify rate increases still remains with the states under the new healthcare law, despite the federal government’s involvement in the review process.
But Consumers Union is encouraging states to adopt reforms in their own review processes to ensure more accountability and transparency from insurers.
© 2013 Newsmax. All rights reserved.