State Net Capitol Journal: Health Care Reform Law Doesn't Halt Major Rate Hikes

One of the main objectives of the Affordable Care Act was to stem the rising cost of health insurance for American consumers. But that hasn't stopped health insurance companies from seeking and obtaining big premium increases across the country.

In Florida and Ohio, insurers have secured rate increases of at least 20 percent for some policy holders, which can add several hundred dollars a month to their bills. And in California, Aetna, Anthem Blue Cross and Blue Shield have proposed increases this year ranging from 20 to 26 percent for some customers.

The double-digit increases are coming just two years after the 39 percent rate hike Anthem Blue Cross sought in 2010 that helped spur the ACA. They're also coming despite evidence that the overall cost of health care has slowed to single-digit growth in recent years as the weak economy has forced consumers to put off treatment. PricewaterhouseCoopers, for instance, projects that health care costs will increase only 7.5 percent next year.

But insurers say medical costs for some of their policy holders are rising considerably faster than the average.

"We need these rates to even come reasonably close to covering the expenses of this population," said Tom Epstein, a spokesman for Blue Shield of California.

Some state insurance regulators also say the rate hikes are justified. Susan E. Voss, insurance commissioner of Iowa, for instance, said there may be no reason to deny Wellmark Blue Cross Blue Shield the 12 to 13 percent rate increase it has requested for some customers, on top of a 9 percent increase granted to the nonprofit insurer last year, because hospital mergers in the state have allowed providers to negotiate higher prices.

"There's a four-letter word called math," she said.

Federal officials say consumer health care costs would be even higher without the health reform law, which requires review of rate increase requests of 10 percent or more and requires insurers to spend at least 80 cents out of every dollar they collect in premiums on actual care and refund any excess to customers.

"Insurers have already paid $1.1 billion in rebates, and rate review programs have helped save consumers an additional $1 billion in lower premiums," said Brian Cook, a spokesman for Medicare, which is helping oversee implementation of the ACA.

According to a federal report issued in September, insurance rates were reduced by almost three percentage points on average.

But some say the rate review process reveals the wide disparity in rates between states where regulators have the authority to deny rates deemed to be excessive and those where regulators lack that power. Regulators in New York, for example, recently invoked their authority to hold rate increases in the individual and small group markets under 10 percent this year. California regulators, meanwhile, won't be able to do much more than check the double-digit rate requests there for technical errors.

"This is business as usual," said the state's insurance commissioner, Dave Jones, who his pushing for state legislative action to give him the authority to deny excessive rate hikes. "It's a huge loophole in the Affordable Care Act." (NEW YORK TIMES) 

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