Despite increasing resources to bolster state reviews of insurance rates and encouraging regulators to check spiraling insurance costs under the healthcare reform law, a new report found a relatively small effect nationwide on premium increases (PDF).
Little impact seen on premium increases
Only five states reported that more than 50% of the rate filings their regulators reviewed in 2010 were disapproved, withdrawn or resulted in rates lower than originally proposed, according a state survey-based report released today by the Government Accountability Office. Another 19 states reported such rate-lowering outcomes occurred among less than 10% of the rate increases they reviewed.
The relatively small impact of regulatory rate reviews came despite at least $50 million provided so far to states by the Patient Protection and Affordable Care Act to bolster states' oversight of rates charged by healthcare insurers in their jurisdictions.
So far, 41 of the 45 states that have received roughly $1 million each to bolster their rate reviews of insurers have taken steps to do so, according to the GAO report. Those actions included two-thirds of state grant recipients increasing their review infrastructure, such as hiring more review staff or bolstering their rate reviewing information technology.
Despite their relatively small effect, so far, those state rate-review efforts were hailed by Senate Democrats Tuesday as the key to limiting future increases in health insurance rates.
“Why are rates going up?” Because they can,” Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee, said at a hearing on the issue. “That's why rate review is so important.”
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