Individual and small-group market health insurance rate review and disclosure: state and federal roles after PPACA.

Abstract

Oversight of private insurance, including health insurance, is primarily a state responsibility. Each state establishes its own laws and regulations regarding insurer activities, including premium increases for the insurance products within its purview. The authority that state regulators have to review and deny requests for premium changes varies from state to state, as do the amount of resources available to state insurance departments for reviewing premium changes. In some markets where insurers have proposed or implemented steep increases, such changes have received considerable attention from the press, state regulators, and policymakers. The Patient Protection and Affordable Care Act (PPACA) requires annual review of premium increases and disclosure of those increases determined unreasonable beginning in September 2011. Under PPACA, each state will conduct these reviews for individual and small-group health insurance unless the federal government concludes they do not have an effective review program and assumes review responsibility. As they did prior to PPACA, state laws govern whether rates go into effect and establish the parameters of regulators' authority. This issue brief outlines specific state and federal roles in the rate review process and changes to rate review processes since PPACA was enacted.