Missouri 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 Missouri 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 Missouri. The following is a general summary of how Missouri intends to use its funding:
- Expand the Scope of the Review Process: Currently, health insurance premiums are not required to be filed with the Department of Insurance. The Department anticipates that the new federal law will provide additional authority to review health insurance premiums and proposes to develop a new review process for the individual and small group markets.
- Improve the Review Process: Missouri currently has no filing requirement. Missouri proposes to use grant funds to construct a data system which will house health insurance premium information and related increases filed with the state. This data system will provide the structure and mechanism for actuaries to perform health insurance premium analysis.
- Increase Transparency and Accessibility: The Department will post real-time health insurance premium filing information on its website and include actual rates and carrier justification for increases in a consumer friendly format. The Department will also post review procedures on its website, and will provide consumers with email notification when carriers file health insurance requests.
- Develop and Upgrade Technology: Missouri will deploy a three-phase information technology infrastructure plan to upgrade its current system.
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.