Texas 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 Texas 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 Texas. The following is a general summary of how Texas intends to use its funding:
- Improve the Review Process: Texas currently conducts limited health insurance premium review due to limited resources. The State intends to implement improved data collection and improve resource levels as well as in depth review of health insurance premiums.
- Increase Transparency and Accessibility: The State currently provides access to health insurance premium filings upon request, unless the information is determined by the State to be confidential or a trade secret, or it is not available. The State will develop a format and process of public disclosure of information including insurer justifications
- Develop and Upgrade Technology: Texas will support health insurance premium review functions and compile and analyze data and assess the validity of proposed increases.
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.