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May 2010

Alternatives to Price Controls For Health Insurance

Some members of the healthcare community  believe  that the regulatory structure in the new health act confers an expost quasi- price control authority to the HHS insurance office.  However it should be noted that although  Congress addressed federal  premium review it  also granted considerable discretion  to HHS  to move towards  a joint federal -state partnership  (with  an emphasis on state)  for the review of premiums  because of the historical presence of state regulation which is  strengthened by an agressive federal grant program to state regulators.  Executive Order 12886 requires HHS to make a finding of compelling need prior to moving toward the  federal price control scenario.

AHIP Comments on RIF for Premium Review

 AHIIP states:

The new Section 2794 Rate Review Process should be considered in the context of all of the other PPACA regulations affecting health plans, including the new medical loss ratio (MLR) provisions;” (2)

AHIP comments here 

The attachment to the coments are appended hereto.    The attachment includes the following statement:

Today, almost every state requires health insurance policy forms and the related rate structure to be filed prior to sale in both the individual and small group markets. Actuarial certification is typically required to demonstrate that the health plan is complying with the small group rate band requirements in effect in most states today. Rate changes operate slightly differently.’

Consumer Union Comments on RIF on Premium Review

Consumer Union comments inclde:

Actuarial justification is largely dependent on the diligence of state actuaries to verify and decide whether the insurer is applying appropriate projection factors. Many states lack the resources to fully assess health insurers’ rate justifications, including all underlying data to substantiate cost projections” (p. 2)

Comments are here.