The rate review program is under the Affordable Care Act, requires health insurers to submit a written request for a rate increase of 10% or more to independent reviewers. The Centers for Medicare and Medicare Services (CMS) will review in nine states that lack the authority to adequately review rates. The remaining 41 states will conduct their own reviews.
Experts that review rates will look for "underlying cost trends in health care to flag instances when insurance companies are unjustly raising costs."
According to the Department of Health and Human Services, insurers that have to go forward with rate increases must post their justifications on their website, and state and federal regulators will post online as well.
"Far too long, families and small employers have been at the mercy of insurance rate increases that often put coverage out of their reach. Rate review will shed a bright light on the industry's behavior and drive market competition to lower costs," Said Kathleen Sebelius, Secretary of Health and Human services, in a statement. We are pleased to team with states to bring this important new protection to consumers and employers."
The Affordable Care Act provides $250 million over five years to states that need help in order to perform stronger reviews. Over the last year, according to HHS, 42 states, the District of Columbia and the five U.S. territories have used $48 million in grants to help improve their oversight of proposed health insurance rate increases.
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