by Matt Valeta, Health Policy Fellow
Colorado’s rate review program has protected consumers from rate increases as high as 24 percent. Established in 2008, rate review allows the commissioner of insurance to review all health insurance rate increases in the individual and small markets in the state to ensure that they are justified. The Division of Insurance used rate review to save Colorado’s consumers $32 million in 2009 and 2010.
Thanks to Obamacare, the Department of Health and Human Services (HHS) is giving states extra support when it comes to rate review. In addition to the state reviews of all premium increases, HHS reviews every increase higher than 10 percent. In 2009, 74 percent of all rate increases nationwide in the small group and individual markets were over 10 percent. Since HHS started doing this additional level of review that number has fallen to just 35 percent in 2012.
By supporting states rate review programs HHS ensures that the largest increases in health rates do not go through without being scrutinized. Often, a state’s Division of Insurance will negotiate the rate down to a more appropriate level. This extra support enables states to do this detailed review on many more rate increases.
How do we know that this decrease in is not because of the recession or a slowing in the growth of health care costs? In the large group market where increases are not subject to rate review, double-digit rate increases have continued to occur at the a high rate.
This latest information about rate review tells us something very exciting—when more scrutiny is given to rate increases the rate increases come in lower. In Colorado there is the opportunity to sign up to receive an email notification whenever you insurer wants to increase your premiums. And you can submit comments on these increase on the division of insurance’s website.
But other states go even farther than Colorado. In states like Oregon and Iowa public hearing are held where insurers must explain to both the division of insurance and consumers why their rate increase is justified. The general public has the opportunity to participate in these hearings. This increased level of review could help control rising premiums even more.
It simply is not affordable for the double-digit rate increases to continue occurring at high levels. Being able to afford the care you need is not too much to ask for. Rate review and public scrutiny is critical part of a more affordable health care system in Colorado.