Looking Under the Hood: “Enhanced” Rate Review to Improve Affordability

By Sabrina Corlette and Vrudhi Raimugia

Health insurance coverage fee evaluate has lengthy been an annual ritual for state insurance coverage departments. In most states, proposed fee will increase are assessed based mostly on whether or not they’re “adequate,” “excessive,” or “discriminatory.” State insurance coverage regulators usually don’t bear in mind whether or not the speed is inexpensive for the patron and whether or not the insurance coverage firm is working to get its policyholders one of the best deal doable from suppliers of well being care items and providers.

Yet the costs charged by suppliers and suppliers are widely known as the first drivers of premium will increase within the U.S. Providers in lots of well being care markets are in a position to cost industrial insurers costs properly in extra of precise prices, largely as a result of consolidation within the supplier market has given well being techniques appreciable market energy. Absent significant competitors in these markets, some states are turning to regulatory choices to maintain costs in test. One of those regulatory choices is an enhanced type of premium fee evaluate, by which regulators are empowered to evaluate whether or not the supplier costs that compose such a big proportion of shoppers’ premiums are affordable or inside prescribed price development targets.

In a just lately launched report, CHIR specialists share findings from a 50-state evaluation of insurance coverage division authority to conduct fee evaluate, with a concentrate on their energy and capability to make use of that course of to rein in supplier value inflation and enhance medical insurance affordability for shoppers.

Download the report right here.

Support for this work was supplied by the Laura and John Arnold Foundation.