Washington 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 Washington 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 Washington. The following is a general summary of how Washington intends to use its funding:
- Improve the Review Process: Washington conducts in-depth actuarial prospective health insurance premium review on all individual and small group health insurance plans. The State will use grant funds to make information technology system upgrades to the filing system which will improve collection, analysis, standardization and reporting of data.
- Increase Transparency and Accessibility: Current State law considers filing information proprietary and it does not currently publish all proposed health insurance premiums for individual health plans on its website. Washington will create a web based consumer website called “Consumer Care" for increased consumer transparency and awareness about the cost and quality of health care as a means to bring long term improvement to health care systems in the State.
- Develop and Upgrade Technology: Washington will use funds to upgrade technology and support improved reporting.
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.