Rate review regulation increases scrutiny on insurance companies

December 22, 2010

 Washington, D.C. –Nevada Senator Harry Reid today announced new protections for consumers of health insurance in Nevada that will shed light on unreasonable premium rate hikes.  The proposed rule to bring more transparency and increased scrutiny to insurance companies is part of the Affordable Care Act and will be finalized early next year after a public comment period.  Reid added this measure to the health care law and Nevada has already received $1 million to implement it.    

“This rule puts Nevadans back in control of their health care,” Reid said. “During negotiations to reform our health care system I added this provision to ensure that insurance companies could no longer rake in huge profits while middle class families in Nevada pay the price through unjustifiably high premium hikes.  Insurance company abuse will no longer be tolerated. I encourage the state to continue to apply for funding to implement rate review.”
                                                                                     
Since 1999, average premiums for family coverage have risen 131 percent.  Proposed rate increases of ten percent of more in 2011 will be scrutinized to determine if they are excessive.

Under the proposed regulation, health insurance companies must publicly disclose and justify any unreasonable rate increases.  States with effective rate review systems would conduct the reviews. If a state lacks the resources or authority to do thorough actuarial reviews, HHS would conduct them.  Meanwhile, HHS will continue to make resources available to states to strengthen their rate review processes.