HHS Issues Final Rule on 'Unreasonable' Insurance Premium Increases - May 24, 2011

The U.S. Department of Health and Human Services (HHS) on May 19 issued a final rule implementing the regulations for federal and state oversight on insurance rates for individual and small group insurance. Effective for rate increases after Sept. 1, 2011, HHS has stated that any rate increase of more than 10 percent will be subject to a rate review, either by a state agency or by HHS, if the state does not have a review process in place. Beginning Sept. 1, 2012, rate increases will be reviewed on a state-by-state basis, based on health care and insurance cost trends in each state. In addition, states will be required to seek public input on the process for insurance plans under review. HHS is also seeking feedback on whether the final rule should apply to small group coverage sold through associations, which may be exempt from state insurance oversight.