Ohio 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 Ohio 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 Ohio. The following is a general summary of how Ohio intends to use its funding:
- Improve the Review Process: Ohio has authority to review and pre-approve individual health insurance premium filings. In the small group market, all small group rate filings are subject to retroactive review and 35% of rates are rejected. Large group rating methodologies are also reviewed. Grant funding will be used to hire additional staff for premium review and to upgrade processes, systems and data analysis capabilities.
- Increase Transparency and Accessibility: Currently Ohio publicly discloses HMO health insurance premium filings once they are approved. The State intends to develop a consumer friendly web application on the department's website to assist consumers in using and understanding the rate filing information.
- Develop and Upgrade Technology: Ohio will add additional data analysis and database development.
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.