Under the Patient Protection and Affordable Care Act, payors have to justify rate increases of 10 percent or more before they take effect. HHS found that two insurance companies proposed unreasonable premium increases in Arizona, Idaho, Louisiana, Missouri, Montana, Nebraska, Virginia, Wisconsin and Wyoming. The increases would have affected a total of 42,000 residents across these states.
At least one requested rate increase was as high as 24 percent. This increase was deemed unreasonable because the insurer would spend a low percent of premium dollars on medical care and quality improvements and the justifications were based on unreasonable assumptions, according to HHS.
Since 2011, when the rate review program began, health insurers have proposed fewer double-digit rate increases. In addition, in the last quarter of 2011, states reported premium increases were reduced by 4.5 percent, with some states reporting decreasing premiums.
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