Tennessee 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 Tennessee 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 Tennessee. The following is a general summary of how Tennessee intends to use its funding:
- Pursue Additional Legislative Authority: Tennessee requires prior approval of individual health insurance premiums only. Grant funding will be used to develop language to expand review and to provide authority to disapprove submitted health insurance premiums.
- Expand the Scope of the Review Process: The State will expand requirements to include both small and large group finings.
- Improve the Review Process: Currently the State requires prior approval of individual rates only. Grant funds will be used for improvements to information systems and electronic data capture.
- Increase Transparency and Accessibility: Currently the department provides access to health insurance premium filings upon request and posts a spreadsheet on its website displaying changes. Grant funds will be used to hold monthly public hearings and consumer meetings, as well as publish information on the web.
- Develop and Upgrade Technology: Tennessee will support electronic collection of premium-related information, the electronic analysis of that information, and the publication of appropriate premium-related information 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.