In an effort to enhance consumer knowledge, the Kentucky Department of Insurance has formulated a list of the most commonly asked questions about rate review.
What is a rate review?
When is a rate review done?
Why do insurers seek product rate increases?
How are premium dollars being spent in Kentucky?
Do rate reviews affect the types of policies offered?
Who is responsible for insurance rate reviews?
Will the public have access to documents filed in a case once a rate review is completed?
Will rate reviews allow consumers to make side by side comparisons of the policies and rates offered by the various insurers?
What are some good sources of reliable information about health care reform?
What is a rate review?
A rate review is an in-depth analysis of all new policies, renewals and proposed products as they are filed with the Department of Insurance by health insurers.
When is a rate review done?
The state process begins when a health insurer asks the Department of Insurance to approve proposed products for new types of policies or higher premiums for any existing products. Under the Patient Protection and Affordable Care Act (PPACA), reviews under a federal process are required whenever a health insurer requests a rate increase of 10 percent or more. The U.S. Department of Health and Human Services (HHS) can also review rate filings.
Why do insurers seek product rate increases?
Rising costs are the most common reason for insurers to request product increases. The avs has increased. It is expensive to develop and market new medical procedures, technologies and prescription drugs. The development of these new innovations has increased the longevity of individuals with chronic diseases. Other factors that contribute to cost increases include unhealthy lifestyles and habits, such as tobacco use and drug abuse.
How are premium dollars being spent in Kentucky?
According to data provided to the Kentucky Department of Insurance, insurers reported premium dollars are spent as follows:
*Includes: Capitation payments and any other services not indicated above.
Do rate reviews affect the types of policies offered?
No, but other provisions of PPACA will bring changes. Examples include the guaranteed issue, an end to lifetime benefit limits and continued coverage of policyholders’ dependents until age 26.
Who is responsible for insurance rate reviews?
State governments are the primary regulators of the insurance industry; the Kentucky Department of Insurance is mainly responsible. However, the federal government will be providing additional oversight due to PPACA.
Will the public have access to documents filed by insurance companies in rate cases?
PPACA will require that all documents be posted on the Internet by the insurer and by the U.S. Department of Health and Human Services in any rate case involving a proposed increase of 10 percent or more on any product effective July 1, 2011. Filings are also available through open records requests from the Kentucky Department of Insurance.
Will rate reviews allow consumers to make side by side comparisons of the policies and rates offered by the various insurers?
No, but such comparisons are expected to be available by 2014 when health insurance marketplaces, or exchanges, are formed by individual states, regions of the country or even the federal government. Exchanges are required under PPACA.
What are some good sources of reliable information about health care reform?
There are reliable sources of information regarding health care reform outside of the Kentucky Department of Insurance, such as the U.S. Department of Health and Human Services Health Care Reform.
