Health Insurance Articles
Consumers Use Health Care Reform To Dispute Rate Increases
2010-04-30
The health care reform measure recently passed by Congress makes it easier for consumers to dispute rate increases on their health insurance policies. All health plans will be required by law within six months to implement processes that make it more accessible for policy holders to appeal claims and coverage determinations. The government will also provide funds to each state to set up offices to assist consumers in dealing with their health insurance agencies. If your rates rise, staff will assist you in filing a formal complaint against the company.
The measure (known as the Patient Protection and Affordable Care Act, signed into law on March 23rd) will also require that 85 percent of the paid premium actually go to pay for health care service rather than agency administrative costs. If the insurance company fails to comply, it must refund that portion of your premium. The new law will also require insurance companies to notify the U.S. Department of Health and Human Services of any rate increases, and the Department may intervene if it considers the rate increase unreasonable.
This comes at a time when state regulators are clashing with insurance companies all over the nation, limiting, and in many cases outright denying, company requests for rate increases. In fact, the final version of the health care reform measure included rate regulation as a response to citizens' outrage over insurance rate increases in California and in other states. Anthem had proposed in early 2010 to raise rates in California by as much as 39 percent; this fact was noted repeatedly by the Obama administration in its push for reform of the health care system.
One of the more recent disputes involves a lawsuit filed April 5th by Blue Cross and Blue Shield of Massachusetts, along with five other insurance companies, which sued the state's insurance department after it refused to accept almost every request for rate increases: 235 out of 274 requests for premium rate hikes were rejected. In the lawsuit, the health agencies asked for an injunction to stop enforcement of the decision. The lower court denied the request.
In other states, including New York and California, legislation is pending that would give state insurance commissioners the power to approve or reject requests for rate increases. Currently, only half of states require that insurance companies receive prior approval from state commissioners before raising premiums.
Although rate increases are being resisted in some states, they have obtained approval in others. In March, Virginia approved a 12 percent rate increase requested by Anthem Blue Cross and Blue Shield, which will affect approximately 2,700 individual subscribers. And Wisconsin approved a 17 percent rate hike in April, which will affect 13,000 policy holders in the state.
