Insurers trying to keep secrets from consumers
One of the key aspects of the Affordable Care Act is holding insurance companies more accountable. For far too long, insurers have jacked up the cost of premiums while not having to explain to the consumers (the ones paying more) where that extra money goes.
Thankfully, the Affordable Care Act levels the playing field between insurance companies and consumers by making sure that insurers can’t increase premiums simply to increase shareholder’s profits. To make this happen, the Obama administration has allocated $109 million to state insurance departments to analyze rate increases and see if they’re justified. This process is called “rate review.”
But some insurance companies are holding out. In New York, several insurers that want to raise their rates by double-digit increases this year have submitted memos to state officials to justify these rate increases, but they’re fighting hard against releasing that same information to the public.
Ben Lawsky, who oversees insurance in New York state said,
How these companies are setting these rates is vital for the public to know, and should not be treated like a state secret. Transparency will promote healthy competition and enable the public to rigorously comment on proposed rates, two goals that all of us should favor.
The increases, which would affect consumers in the private market, range from 8.9% to a whopping 34%! That means that if the rates hikes were allowed to go through, consumers could pay as much as an additional 34% out of pocket just to cover their premiums. During these tough economic times, it’s hard to imagine that scraping together extra money just to stay insured is easy for many American families.
Insurance companies say these rate hikes are simply keeping pace with increasing health care costs, but consumer advocates say that the hikes exceed any documented rising costs. That, coupled with reports that major insurance companies have posted record profits three years in a row, raises doubts about the necessity of such large increases.
To help consumers keep track of rate hikes in their state, the Department of Health and Human Services recently launched a new tool on their Healthcare.gov website. Consumers can view proposed rate increases that are above 10% in their state by clicking here.
For far too long, insurance companies have had the upper hand, all while avoiding accountability and oversight. Now, the Affordable Care Act is making the process of increasing premiums transparent by requiring that insurers provide justifications for unreasonable rates. And the insurance companies need to cooperate, play fair, and stop keeping secrets.