http://www.healthcareshopper.com/blog/ Health Insurance, Health Care Policy, Primary Care, Health Care Reform, Prescription Drugs, Women's Health, Children's Health, Aging en Copyright 2012 Tue, 06 Dec 2011 10:14:06 -0800 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss Spike Dolomite Ward is the founder and executive director of Arts in Education Aid Council, a nonprofit organization that is restoring the arts to public schools in the San Fernando Valley. www.aieac.org **I want to apologize to President Obama. But first, some background.** I found out three weeks ago I have cancer. I'm 49 years old, have been married for almost 20 years and have two kids. My husband has his own small computer business, and I run a small nonprofit in the San Fernando Valley. I am also an artist. Money is tight, and we don't spend it frivolously. We're just ordinary, middle-class people, making an honest living, raising great kids and participating in our community, the kids' schools and church. We're good people, and we work hard. But we haven't been able to afford health insurance for more than two years. And now I have third-stage breast cancer and am facing months of expensive treatment. To understand how such a thing could happen to a family like ours, I need to take you back nine years to when my husband got laid off from the entertainment company where he'd worked for 10 years. Until then, we had been insured through his work, with a first-rate plan. After he got laid off, we got to keep that health insurance for 18 months through COBRA, by paying $1,300 a month, which was a huge burden on an unemployed father and his family. By the time the COBRA ran out, my husband had decided to go into business for himself, so we had to purchase our own insurance. That was fine for a while. Every year his business grew. But insurance premiums were steadily rising too. More than once, we switched carriers for a lower rate, only to have them raise rates significantly after a few months. With the recession, both of our businesses took a huge hit -- my husband's income was cut in half, and the foundations that had supported my small nonprofit were going through their own tough times. We had to start using a home equity line of credit to pay for our health insurance premiums (which by that point cost as much as our monthly mortgage). When the bank capped our home equity line, we were forced to cash in my husband's IRA. The time finally came when we had to make a choice between paying our mortgage or paying for health insurance. We chose to keep our house. We made a nerve-racking gamble, and we lost. Not having insurance amplifies cancer stress. After the diagnosis, instead of focusing all of my energy on getting well, I was panicked about how we were going to pay for everything. I felt guilty and embarrassed about not being insured. When I went to the diagnostic center to pick up my first reports, I was sent to the financial department, where a woman sat me down to talk about resources for "cash patients" (a polite way of saying "uninsured"). "I'm not a deadbeat," I blurted out. "I'm a good person. I have two kids and a house!" The clerk was sympathetic, telling me how even though she worked in the healthcare field, she could barely afford insurance herself. Although there have been a few people who judged us harshly, most people have been understanding about how this could happen to us. That's given me the courage to "out" myself and my family in hopes that it will educate people who are still lucky enough to have health insurance and view people like my family as irresponsible. We're not. What I want people to understand is that, if this could happen to us, it could happen to anybody. If you are fortunate enough to still be employed and have insurance through your employers, you may feel insulated from the sufferings of people like me right now. But things can change abruptly. If you still have a good job with insurance, that doesn't mean that you're better than me, more deserving than me or smarter than me. It just means that you are luckier. And access to healthcare shouldn't depend on luck. Fortunately for me, I've been saved by the federal government's [Pre-existing Condition Insurance Plan](http://www.healthcareshopper.com/health-reform/pcip.htm), something I had never heard of before needing it. It's part of President Obama's healthcare plan, one of the things that has already kicked in, and it guarantees access to insurance for U.S. citizens with preexisting conditions who have been uninsured for at least six months. The application was short, the premiums are affordable, and I have found the people who work in the administration office to be quite compassionate (nothing like the people I have dealt with over the years at other insurance companies.) It's not perfect, of course, and it still leaves many people in need out in the cold. But it's a start, and for me it's been a lifesaver -- perhaps literally. Which brings me to my apology. I was pretty mad at Obama before I learned about this new insurance plan. I had changed my registration from Democrat to Independent, and I had blacked out the top of the "h" on my Obama bumper sticker, so that it read, "Got nope" instead of "got hope." I felt like he had let down the struggling middle class. My son and I had campaigned for him, but since he took office, we felt he had let us down. So this is my public apology. I'm sorry I didn't do enough of my own research to find out what promises the president has made good on. I'm sorry I didn't realize that he really has stood up for me and my family, and for so many others like us. I'm getting a new bumper sticker to cover the one that says "Got nope." It will say "ObamaCares." *Reprinted from the OP/ED Section of the LA Times on 12/6/2011*]]> http://www.healthcareshopper.com/blog/2011/12/pre-existing_conditions_insurance.html http://www.healthcareshopper.com/blog/2011/12/pre-existing_conditions_insurance.html Health Care Reform Tue, 06 Dec 2011 10:14:06 -0800 health insurance exchange, which states must establish by 2014. Exchanges will provide information about competing insurance companies and their plans' benefits and costs.]]> http://www.healthcareshopper.com/blog/2011/04/retail_health_insurance_stores.html http://www.healthcareshopper.com/blog/2011/04/retail_health_insurance_stores.html Health Insurance Wed, 27 Apr 2011 15:43:55 -0800 Aon Hewitt Inc. is developing a health insurance exchange that would enable employers with least 1,000 employees to offer their workers an array of plans provided by participating insurers. By using the exchange, employers would be relieved of the time and expense of choosing health insurers and administering their plans, while employees would have a broader choice of health plans, explained Ken Sperling, global health and benefits practice leader in Aon Hewitt's Norwalk, Conn., office. "Employers wouldn't have to worry about bids or plan administration," Mr. Sperling notes. Instead, the employer's only role would be deciding how much of the premium it would pay for each option. **Several Options** Insurers would offer identical plans with five different levels of benefits, including three high-deductible plans that could be linked with health savings accounts and another whose benefit coverage would resemble that of a traditional PPO plan. Premiums initially would be set on an employer-by-employer basis. Mr. Sperling said the program is geared toward employers with at least 1,000 employees, adding, though, that Aon Hewitt has received interest in the exchange concept from employers of various sizes and industries. For insurers, the exchange concept offers the potential of tapping a much larger market. **Earlier Program** The exchange, which Lincolnshire, Ill.-based Aon Hewitt hopes to launch in 2012, would be an extension of a retiree medical exchange program it now administers and through which about 50 insurers offer coverage to 2.4 million retirees and dependents. The average participant has access to 32 medical plan and 23 prescription drug plan choices, an Aon Hewitt spokesman said. http://www.healthcareshopper.com/blog/2011/04/aon_hewitt_health_exchange.html http://www.healthcareshopper.com/blog/2011/04/aon_hewitt_health_exchange.html Health Insurance Mon, 25 Apr 2011 15:17:27 -0800 Key Findings Some health advocates have expressed concern that high-deductible plans could spur low-income families and people with chronic illnesses to forgo necessary medical care. However, Amelia Haviland -- lead author of the study and a statistician at RAND -- said researchers "did not find greater cutbacks for medically vulnerable families." The study found that some high-deductible plan enrollees with chronic illnesses were more likely to obtain certain preventive services than low-income and non-vulnerable enrollees. Researchers noted that policyholders of all income levels tended to use recommended preventive services less frequently after switching to a high-deductible plan. In addition, the study found that the size of the deductible affected spending on health services among non-vulnerable families. According to Haviland, medically vulnerable families reduced spending on prescription drugs only when deductibles were at least $1,000 per person. Implications Haviland said the study "suggests that non-vulnerable families, low-income families and high-risk families are equally affected under high-deductible plans." Researchers noted that the findings could become more pertinent over the next few years because the state health insurance exchanges mandated under the federal health reform law could start offering high-deductible health plans in 2014. ______________________________________________________________________ Read more: http://www.californiahealthline.org/articles/2011/4/19/highdeductibles-not-triggering-atrisk-enrollees-to-forgo-care.aspx#ixzz1JzNpHYL1]]> http://www.healthcareshopper.com/blog/2011/04/high_deductible_risk.html http://www.healthcareshopper.com/blog/2011/04/high_deductible_risk.html Health Insurance Tue, 19 Apr 2011 09:57:36 -0800 Massachusetts became the first state to move toward universal health insurance five years ago. Now, the state is debating how to replace the fee-for-service medical system. Mass Governor Deval L. Patrick (D) is trying to push the health care system here into a new era of cost control. He is proposing a new way of paying for care that would give lump payments to teams of doctors responsible for almost all the care of a group of patients, with bonuses for saving money and dispensing high-caliber services that keep people healthy. **"We did access first," said state Senate President Therese Murray (D). "Now we have to figure out how we afford that."** In 2006 created a [health insurance exchange](http://www.californiahealthbenefitexchange.com/health_insurance_exchange.htm), a requirement that most residents carry coverage and subsidies to help them pay for it -- central elements now in the federal Affordable Care Act (ACA). As a result, 98 percent of the residents here are now insured, but the first round of health care changes devoted far less attention to medical costs. Leaders from the state's insurance and hospital industries, medical society, legislature and governor's staff served on a special state commission assigned to diagnose the cause of soaring medical spending. **Fee-for-service medicine "is a primary contributor to escalating costs and pervasive problems of uneven quality," the commission unanimously concluded in 2009.** In 2009 Blue Cross Blue Shield of Massachusetts it began a new payment system called Alternative Quality Contracts. The arrangement is a version of the accountable care organizations that the federal government also is trying to encourage in Medicare. They pay teams of doctors or hospitals a lump sum or what is called a "global budget" for the patients assigned to them. If a team can provide care for less, it keeps some of the savings, assuming it also meets enough of 64 measures of quality that Blue Cross has defined. Today, about one-third of the primary care doctors in Blue Cross's network are taking part. A half-million HMO patients have been put in them -- but not told by the insurer. At Partners HealthCare, the famous Boston-based medical system that dominates health care locally, Massachusetts General Hospital has been conducting a Medicare experiment in which nurses are assigned to coordinate care for about 2,500 older patients with multiple ailments. The experiment, which began five years ago, so far has reduced hospital re-admissions by one-fifth and cut medical spending by 7 percent. ----------------------------------------------------------------------------------------------------------- *Amy Goldstien, Washington Post National*, [ full article ->](http://www.washingtonpost.com/national/massachusetts-pioneer-of-universal-health-care-now-may-try-new-approach-to-costs/2011/04/07/AFDrunkD_story.html) http://www.healthcareshopper.com/blog/2011/04/massachusetts_medical_cost_control.html http://www.healthcareshopper.com/blog/2011/04/massachusetts_medical_cost_control.html Health Care Policy Fri, 15 Apr 2011 15:26:57 -0800 President Obama signed legislation Thursday, April 14 repealing the expanded 1099 reporting requirements in the health care reform law and Small Business Jobs Act. The widely unpopular rules would have required businesses to report any purchases of goods or services of more than $600 a year from another vendor to the IRS on a Form 1099-MISC. President Obama supported repealing this provision and with a bipartisan effort, lawmakers removed a requirement that would have been an undue barrier to small business growth. The many benefits of the health reform law for small businesses remain in place. These tools are already helping small business owners find more affordable and accessible coverage for themselves and their employees. House Ways and Means Committee Chairman Dave Camp, R-Mich., praised the repeal. "After nearly a year-long battle to repeal the onerous 1099 provisions enacted by Democrats, I am pleased the President has now signed their repeal into law," he said. "On the eve of Tax Day, small businesses can finally breathe a huge sigh of relief that one of the many burdens the Democrats' health care law would have placed on them has been repealed. Instead, small businesses can focus more of their energies and resources on creating jobs, not filling out yet another form for the IRS." http://www.healthcareshopper.com/blog/2011/04/1099_reporting_requirements_re.html http://www.healthcareshopper.com/blog/2011/04/1099_reporting_requirements_re.html Health Care Reform Thu, 14 Apr 2011 15:39:17 -0800 **Narrow Network HMOs** Thousands of employers in California and across the U.S. are eliminating costly physicians and hospitals from their health care provider networks in an effort to reduce health care costs. Since the recession started in 2008, more than 10,000 California employers and public agencies have opted for so-called "narrow network" HMOs. Such health plans offer fewer choices in health care providers but can reduce an employer's spending on insurance premiums by nearly 25% in some cases. **Small Business Favorites** Insurers and employers say the narrow networks are growing fastest among small businesses. However, some larger entities -- such as CalPERS and the University of California -- also are offering narrow network plans from Blue Shield of California and Health Net. **Health Advocates Push Back** Consumer advocates and health care experts warn that cutting physicians and hospitals from health plan networks might harm patients, particularly those who depend on specific health care providers for the treatment of life-threatening or chronic conditions. They added that HMO enrollees seeking care from out-of-network health care providers typically are responsible for the entire cost of their treatment. **Insurers' Position** Health insurers contend that they take health care quality into account when designing the smaller provider networks. They also argue that narrow network HMOs do not dramatically reduce enrollees' choices, noting that the networks often include many of the same health care providers listed in the broader HMO networks. http://www.healthcareshopper.com/blog/2011/04/narrow_network_hmo_plans.html http://www.healthcareshopper.com/blog/2011/04/narrow_network_hmo_plans.html Health Insurance Fri, 01 Apr 2011 16:21:18 -0800 Reporting is Voluntary for All Employers for 2011 and Small Employers for 2012 The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Notice 2010-69, issued last fall, made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012). In yesterday's guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and continuing this optional treatment for smaller employers until further guidance is issued. Using a question-and-answer format, Notice 2011-28 also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage. The 2011 Form W-2, prior IRS Notice 2010-69 deferring the reporting requirement for 2011, and Notice 2011-28 containing the new guidance are available on IRS.gov. ]]> http://www.healthcareshopper.com/blog/2011/03/irs_guidance_on_reporting_grou.html http://www.healthcareshopper.com/blog/2011/03/irs_guidance_on_reporting_grou.html Group Health Benefit Health Insurance Tue, 29 Mar 2011 13:24:15 -0800 Code Section 125 regulations allow employers to use forfeited contributions to pay plan administrative expenses and offset costs incurred by employees who spend their FSA funds and then terminate employment. Most Health Benefit Advisers would prefer legislation to allow unused FSA dollars to simply remain in an individual's FSA to meet future health care needs. That way the funds could continue to be available for the purpose they were intended to serve and both employees and employers could be spared the need to pay taxes on excess FSA contributions. Many employer clients reported that the rule discouraged participation in "cafeteria plans" as these FSA plans are commonly called. These plans are an important employee benefit as employee contributions to premiums and other out-of-pocket expenses increase. FSAs can help families save by using pre-tax dollars to pay for theses expenses. The use-it-or-lose-it rule is a missed opportunity for FSA participants to better manage their health. This legislation ensures that individuals will not be forced to use up or forfeit any remaining FSA funds simply because their families' needs did not match their predicted annual health care expenses The rule was designed to prevent FSAs from being turned into tax shelters during a time when that concern was top of mind at the federal level, but in 2013 the Patient Protection and Affordable Care Act will slice in half the $5,000 maximum FSA contribution that each employee is now allowed to make. FSA proponents argue that the impending change will eliminate such concerns. Reps. Boustany and Larson recently noted in a letter that more than 85% of large employers offer FSAs, but only 20% to 22 % of eligible employees enroll. The principal reason for not enrolling, or for underfunding accounts is fear of the use-or-lose provision. They also said that one quarter of participants forfeit some of their FSA funds each year.]]> http://www.healthcareshopper.com/blog/2011/03/use_it_or_loose_it.html http://www.healthcareshopper.com/blog/2011/03/use_it_or_loose_it.html Group Health Benefit Wed, 16 Mar 2011 15:39:43 -0800 survey by the Public Policy Institute of California, nearly 60% of Californians believe major changes are needed in the state's health care system. Changes to Health System The poll found that 62% of Democrats and 61% of independents thought major changes were needed in California's health care system, compared with 53% of Republicans. Researchers also found that:

• 91% of respondents said that universal children's health coverage is important for preventing illness:
• 60% of respondents said they wanted more emphasis on preventive health care rather than treatment;
• 40% of respondents said they were very satisfied with the quality of their health care; and
• 22% said they were dissatisfied with the quality of their health care.

In addition, 53% of respondents said they were very concerned that California's budget deficit would lead to major cuts in health and human services, while 31% of respondents said they were somewhat concerned. Federal Health Reform Law When asked about the federal health reform law, 51% of respondents said they support the overhaul and 36% said they oppose it. The findings show that support for the reform law is stronger in California than it is nationwide. Last month, a nationwide poll by the Associated Press and GfK found that 40% of Americans support the reform law, compared with 41% who oppose it. Personal Wellness About 80% of the poll respondents said their health was excellent or very good, with responses varying by ethnicity and socioeconomic conditions. Fifty-one percent of respondents with health insurance coverage said their health is excellent or very good, compared with 31% of those without coverage.]]> http://www.healthcareshopper.com/blog/2011/02/california_health_care_system.html http://www.healthcareshopper.com/blog/2011/02/california_health_care_system.html Health Care Policy Wed, 09 Feb 2011 15:02:51 -0800 Three major California health insurers have agreed to comply with Insurance Commissioner Dave Jones' (D) request to delay their planned premium increases for 60 days, the Los Angeles Times reports. Background Aetna, Anthem Blue Cross and PacifiCare all recently submitted notices about their plans to raise rates for members with individual health insurance policies (Ceasar/Helfand, Los Angeles Times, 1/27). The insurers' rate filings show that:

• Anthem proposed raising premiums by an average of 9.8%;
• PacifiCare proposed raising premiums by between 2.5% and 9.1%; and
• Aetna proposed raising rates by an average of 2.8% (Colliver, San Francisco Chronicle, 1/28).

Delay Details Jones asked the insurers to delay their premium increases so he would have sufficient time to review their rate filings and ensure that they comply with state law. Both Aetna and Anthem proposed two rate hikes that would have taken effect on Jan. 1 and April 1. The health plans agreed to delay both rate hikes for 60 days past their original starting date. PacifiCare also proposed a rate hike that was scheduled to take effect on Jan. 1, but said the increase now would be delayed until April 1. No Delay for Blue Shield Meanwhile, Blue Shield of California is moving forward with its plan to increase premiums by an average of 30% for nearly 200,000 individual policyholders. The insurer rejected Jones' request to delay a 6% premium increase scheduled for March 1, which would be Blue Shield's third rate hike since Oct. 1, 2010. Some Blue Shield policyholders could see their premiums climb by as much as 59% cumulatively after the three rate increases. In a statement, Jones said, "Blue Shield policyholders will not have the benefit of this additional review period to ensure compliance with the law, but I will do what is within my power to determine whether Blue Shield's proposed rates are in compliance with the law and to enforce that law" (Thompson, AP/Bloomberg, 1/27). Blue Shield said it has hired an outside actuary to review its rate filings. The company also said it would issue refunds to policyholders if the actuary finds the rates to be unsound (Calvan, Sacramento Bee, 1/28).]]> http://www.healthcareshopper.com/blog/2011/01/rate_hikes_delayed.html http://www.healthcareshopper.com/blog/2011/01/rate_hikes_delayed.html Health Insurance Thu, 27 Jan 2011 15:55:42 -0800 Small Business Majority (SBM). "I'm not surprised," John Arensmeyer of the California chapter of the SBM said. "There has been a lot more heat than light shared on this law, so there's been a lot of confusion." Arensmeyer has worked on a statewide "listening tour" for the past nine months, talking to small business owners about the creation of California's health benefit exchange and the potential savings from the tax credit. "People don't really know for sure what's in the bill," Arensmeyer said. "Then when they see what's in it, they're pretty receptive to it." According to a different SBM study released last month, a lot of California businesses could use the tax credit that allows businesses to declare a tax credit of up to 35% of their health insurance costs beginning last year (if they have fewer than 25 employees with average annual wages under $50,000). "What we've found in California was that 80% of businesses are eligible for the credit," Arensmeyer said. That's why Arensmeyer has been traveling the state, he said, to see what people's concerns are about the health reform law, and to make sure people understand what they might get out of it. He said his organization is summarizing the results of the listening tour and will issue a report about it on Feb. 1. He also plans to do a survey specific to California right after that. "We'll be in the field in February or March," he said, "and by early spring we'll have some results." Small Businesses Eligible for Health Insurance Incentive by David Gorn CaliforniaHealthline]]> http://www.healthcareshopper.com/blog/2011/01/small_businesses_unfamiliar_wi.html http://www.healthcareshopper.com/blog/2011/01/small_businesses_unfamiliar_wi.html Health Care Reform Health Insurance Tue, 25 Jan 2011 07:16:33 -0800 health insurance companies that recently announced rate increases for individual policies. Recent Rate Hikes On Jan. 6, Jones asked Blue Shield of California to delay a planned series of rate hikes that could total as high as 59% for individual policyholders. This week, the commissioner asked Aetna, Anthem Blue Cross and PacifiCare to postpone their planned rate increases so he could review the filings. Jones said, "We have a long history in California of 10%, 20%, 30%, 40% rate hikes. This is just business as usual." Major Issue in California Rate increases in the individual health insurance market have been a major issue in California because the state has the largest number of individual policyholders. About two million Californians purchased individual health insurance policies in 2009, according to the Kaiser Family Foundation. Marian Mulkey -- director of health reform at the California HealthCare Foundation -- said premiums have been rising across California because the state's economic downturn has prompted many healthy residents to cancel their coverage, leaving insurers with a higher proportion of sick people in their coverage pools. Authority Over Rate Hikes California regulations require health plans to submit their rates to the insurance commissioner, who can review them to ensure they are in compliance with state law. The state does not allow the commissioner to reject premium increases. During his time in the state Assembly, Jones authored legislation that would have authorized the commissioner to reject rate hikes, but the measure failed to pass. Jones has said he intends to support similar legislation this year. Meanwhile, the federal health reform law is expected to increase oversight of rate increases nationwide. Starting in July, the federal government will have the authority to review premium hikes exceeding 10% in states that do not have sufficient rate review procedures in place. Although federal officials will not be able to reject the premium increases, insurers will be required to justify their rates.]]> http://www.healthcareshopper.com/blog/2011/01/ca_insurance_commissioner_heig.html http://www.healthcareshopper.com/blog/2011/01/ca_insurance_commissioner_heig.html Health Insurance Fri, 14 Jan 2011 08:56:42 -0800 Medicare waiver from the federal government. The plan, which the state calls a "bridge to reform," is also designed to bolster the state's safety-net hospitals, as well as lower overall health care costs. Under the agreement (a waiver of standard Medicaid rules aimed at allowing states to test innovative new programs) California promised to shave $2 billion per year from its existing Medi-Cal bill by streamlining care for its highest-cost recipients: seniors, adults with disabilities and children with severe illnesses. The federal government agreed to give California $2 billion per year in return. The plan, which the state calls a "bridge to reform," is also designed to bolster the state's safety-net hospitals, as well as lower overall health care costs. Under the Nov. 2 agreement _ a waiver of standard Medicaid rules aimed at allowing states to test innovative new programs _ California promised to shave $2 billion per year from its existing Medicaid bill by streamlining care for its highest-cost recipients: seniors, adults with disabilities and children with severe illnesses. The federal government agreed to give California $2 billion per year in return. The California safety net weathered the recession to date because the enhanced federal aid required the state not to narrow eligibility for Medi-Cal, even though it was allowed to pare back some benefits. The Affordable Care Act (ACA) continues that requirement until 2014, but the extra money from Washington is set to run out in June. That is forcing California leaders to contemplate a new round of cuts. This week, newly elected Gov. Jerry Brown proposed $1.7 billion in cuts to the Medi-Cal program, including new limits on prescription drugs and doctor visits. ]]> http://www.healthcareshopper.com/blog/2011/01/california_health_safety_net.html http://www.healthcareshopper.com/blog/2011/01/california_health_safety_net.html Health Care Policy Thu, 13 Jan 2011 16:30:21 -0800 The Department of Health and Human Services (HHS) has issued a preliminary version of the regulation aimed at controlling "unreasonable" rate increases at the national level. The draft regulation requires carriers to publicly disclose any individual or small group health insurance rate increases higher than 10 percent. The regulation is still open to comment and subject to change. Double-digit increases will trigger a review by state or federal regulators to determine if they're justified. States will get the first shot at scrutinizing the rate hikes. If HHS determines a state lacks the ability to do a thorough actuarial review of premium increases, federal regulators step in. States are eligible for federal grants to bolster their review capabilities and 45 states have taken advantage of the program to date. This 10 percent threshold can be adjusted on a state-by-state basis over time. After 2011, a state-specific threshold would be set for the disclosure of rate increases, using data that reflect each state's cost trends. Significantly, neither the regulation nor the Affordable Care Act gives HHS the power to deny rate increases. If they determine a premium hike sought by a carrier is unjustified it will post that finding on a government website, but the increase will still be permitted unless a state regulator prevents it. Most states already review rate increase proposals and some can deny rate increases on individual and small group medical insurance coverage. How it Works The mechanics of the rate review are described in the proposed regulation. If they want a rate increase over 10 percent or greater, the carrier will need to notify HHS and post its justification on the insurer's web site. The HHS will consider whether:

• The rate increase results in a projected future loss ratio below the Federal medical loss ratio (MLR) standard.
• One or more of the assumptions on which the rate increase is based are not supported by substantial evidence.
• The choice of assumptions or combination of assumptions on which the rate increase is based is unreasonable.

The timing of the rate increase is determined by state law, so HHS' review cannot delay implementation of the rate change. What it will do, however, is require disclosure of a great deal of information, bringing an unprecedented amount of transparency to the rate setting process. The new regulation provides a strong incentive for insurers to do a thorough review of their justifications before asking for big rate increases. ]]> http://www.healthcareshopper.com/blog/2010/12/heath_insurance_rate_increase.html http://www.healthcareshopper.com/blog/2010/12/heath_insurance_rate_increase.html Affordable Care Act Health Care Reform Tue, 28 Dec 2010 15:26:34 -0800