The Rate Review Program — which began in September 2011 — requires health insurers to submit and justify any proposed rate increase of 10 percent or more to HHS and/or the relevant state. Under the Rate Review Grant Program, HHS is also providing states with $250 million in funding over five years (fiscal years 2010 through 2014) to improve their rate review capabilities.
HHS analyzed data for 2013 submitted by states receiving rate review grants (40 states in the individual market and 37 in the small group market) and found rate review reduced total premiums by approximately $290 million in the individual market and $703 million in the small group market. The average requested rate increase was cut by 8 percent for the 40 states studied in the individual market and by 11 percent for the 37 states in the small group market.
In July, HHS reported another PPACA provision concerning medical loss ratios had saved consumers $9 billion since 2011 in reduced overhead and refunds. To cut costs, since 2011, the PPACA has required health insurers to maintain a minimum medical loss ratio — the percentage of premium dollars an insurer spends on medical care and quality improvement expenses, minus what the company spends on overhead (profits, administrative costs and sales expenses) — of 80 percent in the individual and small group markets and 85 percent in the large group market. Health insurers that don’t satisfy the medical loss ratio requirement must pay back the difference in the form of consumer rebates.
More articles on the PPACA:
Senate Democrats block ‘keep your plan’ bill
PPACA enrollment estimate revised down to 7.3M
Most PPACA enrollees happy with plans, Commonwealth Fund finds
