New Tools on Healthcare.gov

New Online Tool Gives You More Information about Premium Increases

By Kathleen Sebelius, Secretary of Health and Human Services

Posted October 07, 2011

For too long, when it came to health insurance, consumers were left in the dark. In the past, insurance companies could often raise your rates without any transparency or accountability. Many insurers were under no obligation to give you any explanation as to why they felt an increase was necessary. Thanks to the Affordable Care Act, this is changing.

Starting today, you will begin to have more information about your health insurance premiums. This year, in every State and for the first time ever, the Affordable Care Act requires insurance companies to publicly justify their actions if they want to raise rates by 10% or more.

Today, we posted the first set of explanations from insurance companies. Right here on HealthCare.gov.

We’ll update the site with more information from other insurers as it comes in so you can see why insurance companies think they should raise your rates. On our website, you will also have the opportunity to submit comments and share your views on the proposed rate increase. Please send your comments to ratereview@hhs.gov.

At the same time, independent experts will determine whether or not the increase is reasonable.

This process is known as “rate review.” It makes the health insurance marketplace more transparent and holds insurance companies accountable. It promotes competition that can drive down costs. And we know rate review works:

• Oregon forced an insurer, Regence, to lower its request for a rate hike by nearly 10% for 60,000 enrollees after public hearings and scrutiny.
• Connecticut’s Insurance Department rejected a 20% rate hike by Anthem.
• North Carolina saved beneficiaries $14.5 million by reducing a rate increase request from the State’s Blue Cross Blue Shield plan.
• And, Aetna scrapped a proposed 19% rate increase in California after a close review found math errors that undermined the need for the hike.

Insurers are also now required to spend most (80% or 85%) of the dollars you put toward insurance on your care – instead of on advertising or big CEO salaries – so you can get more value for your money. This is known as “medical loss ratio.” If they don't spend at least 80 cents of every premium dollar you pay on your health care, they must refund the difference to you. Consumers will start receiving these rebates next year.

We, in partnership with States, are taking a good, hard look at why insurance companies are seeking to raise your rates, why your premiums might be going up, and making sure these decisions are public and justified.

This is just a start, and over time we will be posting these requests as they come in. Be sure to check back, though, as we’ll be updating the website regularly.

And if you see your insurance company’s rate and don’t like its reason for raising it, you may be able to take your business elsewhere. Check out your options on HealthCare.gov.