Arkansas is Cracking Down on Unreasonable Health Insurance Premium Hikes
For too long, insurance companies in many States have increased health insurance premiums with little oversight, transparency, or public accountability. Some States have both the authority and the capacity to review insurers’ proposed health insurance premium increases. Just 26 States and the District of Columbia have the authority to reject a proposed increase that is excessive, lacks justification or exceeds certain standards. Many do not, and some who have the authority lack the right tools to exercise that authority to reject excessive premium increases. This lack of authority and resources for States has unfortunately contributed to unjustified premium increases. Health insurance premiums have doubled on average over the last 10 years, much faster than wages and inflation, putting coverage out of reach for millions of Americans and business owners.
The Affordable Care Act provides States with $250 million in Health Insurance Premium Review Grants over five years to help states like Arkansas help transform the way they review proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes, and ensure consumers receive value for their premium dollars.
On August 16, the Department of Health and Human Services announced the award of $46 million in the first round of these grants, including $1 million for Arkansas. The following is a general summary of how Arkansas intends to use its funding:
- Pursue Additional Legislative Authority: Arkansas currently has prior approval over individual market rates. Arkansas will seek authority to review small group rates.
- Improve the Review Process: Currently Arkansas conducts prospective review of individual coverage and intervenes for health insurance premium increases above 10 percent. The State will work with consultants to develop a more thorough review process for filings.
- Increase Transparency and Accessibility: At present, the State publishes approval and disapproval of health insurance premiums on its website and requires 30 days public notice for increases in health insurance premiums prior to implementation – but no details are published. Arkansas has proposed to create and staff a consumer-driven advisory council to improve transparency and communications to all stakeholders. The State will also expand its website and create a health insurance premium review center for consumers and issuers.
- Develop and Upgrade Technology: Arkansas will enhance technology and programmatic infrastructure to effectively collect, analyze, track and report health insurance rate filings and establish a data center to compile and publish fee schedule information.
The Health Insurance Premium Review Grants are one element of a broad effort under the Affordable Care Act to reduce the unsustainable rates of increase proposed by some insurers today. Additional resources from this $250 million program for rate review will be available in subsequent years to further strengthen State health insurance premium review procedures.