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Tuesday, December 14, 2010

Unreasonable premium hike rejected

Colleen Haller

Staff Writer

The rising cost of health coverage continues to burden families across the country. Whether you have coverage through your job or on the individual market, premium rates continue to outpace paychecks. Sometimes these increases in premium rates are in response to rising health care costs; however, not all rate increases are justified.

Connecticut’s Insurance Commissioner knows this first hand. The company in question, Anthem Blue Cross and Blue Shield, proposed a 20 percent increase in their premium rates for individuals and families who buy their coverage on their own in the individual market. However, after regulators’ actuarial analysis revealed that the increase was completely unnecessary and “excessive,” the proposed increase was rejected. The Connecticut Insurance Commissioner’s decision protected 48,000 consumers from having to pay an extra 20 percent in premiums, no small thing for working families.

While states have varying authority to review insurance rates, the Affordable Care Act provides millions in grants for states to strengthen their review processes. These grants will  help all states work toward a strong rate review system that allows regulators to fully protect residents, just like Connecticut’s commissioner did last week.

The new law also requires insurers to justify any unreasonable rate increases to regulators and the public starting next year. Insurers will be held accountable for the decisions that they make. Companies will also be required to spend at least 80 percent of premiums on actual health care and quality improvement efforts, instead of on executive salaries and administrative costs. And if they don’t, they must send a rebate to their customers.

The new law puts pressure on insurance companies to provide fair, affordable health coverage, making them work for consumers first and shareholders second. If insurers are unable to live up to their new responsibilities, inappropriately raising rates in the next few years, they may not be allowed to participate in the new health insurance exchanges. The Affordable Care Act provides consumers with the tools they need to keep their insurer honest, and to make sure that their insurance will be there when they need it most.