North Carolina 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 North Carolina 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 North Carolina. The following is a general summary of how North Carolina intends to use its funding:
- Pursue Additional Legislative Authority: Currently all individual rates are subject to prior approval. North Carolina will seek legislative action to standardize data collection and to require that simplified summary information be submitted as a part of this data collection for consumers.
- Expand the Scope of the Review Process: The State will expand to prior approval of small and large group markets.
- Improve the Review Process: North Carolina has HMO and individual health insurance premium review currently. The State is seeking expanded authority and will improve the reporting and data collection.
- Increase Transparency and Accessibility: Currently all filings free of confidential information are posted on the web. North Carolina is seeking authority to require insurers to create consumer-friendly summaries. Consideration and planning for public comment and hearings will be explored.
- Develop and Upgrade Technology: North Carolina will improve its efficiency and data collection to aide in the health insurance premium review process.
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.