Wisconsin 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 Wisconsin 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 Wisconsin. The following is a general summary of how Wisconsin intends to use its funding:
- Additional Legislative Authority: Grant funds will be used to assess the need to pursue additional statutory authority to collect and review – on an ongoing basis – detailed rate information for the large group market.
- Expand the Scope of the Review Process: The State will expand health insurance premium review of non-group and group markets.
- Improve the Review Process: Wisconsin currently reviews health insurance premium filings for the individual market using actuaries, but only in a limited way. Grant funds will be used for actuarial consulting to develop more rigorous standardized requirements. Funding will also be used to assess the need for additional legislation or regulations.
- Increase Transparency and Accessibility: Wisconsin currently publishes health insurance premium filings on their website and insurers are required to provide 60 days notice to consumers for increases. Using grant funds, the State will develop a public hearing and comment process and create more understandable information and explanations for consumers.
- Develop and Upgrade Technology: Wisconsin will 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.