WASHINGTON, DC— U.S. Senator Bob Casey (D-PA) applauded a new grant to help Pennsylvania protect consumers from unreasonable premium rate hikes for their health insurance coverage. Pennsylvania will receive $1 million from the Health Insurance Premium Review Grants to provide greater authority and resources to review and take action against insurers and to help ensure that consumers receive better value for their premium dollars.
“Rapidly rising insurance premiums over the years have increased costs for families and businesses,” said Senator Casey. “I am pleased that Pennsylvania will receive this funding to help provide consumers with more information and give them more control over their health care choices.”
For too long, insurance companies in many States, including Pennsylvania, have increased health insurance premiums with little oversight, transparency, or public accountability. Some States have both the authority and the capacity to review insurers’ proposed health insurance premium increases, but only half the States (26 and the District of Columbia) have the authority to reject a proposed increase that is excessive, lacks justification or exceeds certain standards.
Even those states that have authority over segments of the market, such as Pennsylvania, often lack the right tools to exercise that authority to reject excessive premium increases. This lack of authority and resources has contributed to unjustified premium increases. Health insurance premiums have doubled on average over the last 10 years, much faster than wages and inflation, putting coverage out of reach for millions of Americans and business owners.
Pennsylvania intends to use the funding it has received to improve consumer protections in several ways, including to:
• Improve the Review Process: Currently, the Commonwealth conducts actuarial review of individual market products. Commercial carriers are not required to file group rates. Pennsylvania intends to collect data from insurers in the individual and small group markets and will create a Health Insurance Rate Level Index database, which will be used as a resource for Department staff when reviewing rate filings and to develop comparison charts so that consumers can compare rates.
• Increase Transparency and Accessibility: Currently health insurance premium increases above 10 % are published on the web. The Commonwealth will provide health insurance premium information to the public and will develop enhanced consumer information, including premium comparisons and consumer education tools.
• Develop and Upgrade Technology: Pennsylvania will produce a web based data collection tool and database to provide information to the public.
The Health Insurance Premium Review Grants are one element of a broad effort under the Affordable Care Act to reduce the unsustainable rates of increase proposed by some insurers today. Additional resources from this $250 million program for rate review will be available in subsequent years to further strengthen State health insurance premium review procedures.
To further protect consumers from unforeseen and excessive increases in insurance costs, Senator Casey is a cosponsor of The Health Insurance Rate Authority Act of 2010 (S. 3078). This legislation, introduced by Senator Dianne Feinstein in the wake of major and unmerited increases in premiums for Californians, would help protect individuals and small businesses from dramatic increases in insurance costs by creating a “federal fallback” authority that – in the case state oversight did not exist or was insufficient – would review and approve premium rates.