Website lets you keep tabs on health insurers' rate hikes

Jill Overmyer

If you've ever seen your once-affordable health insurance premium suddenly shoot up, you know how frustrating it can be not to have any warning. A recent provision of the health care reform law aims to change that. In October 2011, the Department of Health and Human Services (HHS) launched an online tool that helps consumers find out about large proposed rate increases.

An important heads-up

The new online feature is part of a new requirement for health insurers. If they want to raise rates by more than 10 percent, they must publicly announce the proposed increase and give reasons for it. That's where the online tool comes in. Consumers can search by state to find out which companies are raising rates and by how much.

For example, a search for rate increases in New York reveals that Empire HealthChoice HMO wants to raise its rates for some plans by more than 20 percent. A synopsis of the proposal indicates that the increase would go into effect in April 2012 and would affect more than 51,000 customers. Below the basic information is an explanation from the insurer about why rates are going up -- in this case, because the cost of providing coverage to small groups in New York is increasing.

The online tool gives consumers time -- time to find a new provider because they know a rate increase is coming and, possibly, time to change things. Consumers can submit their comments about the rate increase to HHS. These comments will become part of a process known as a rate review.

The rate review

The new online tool is part of the health care reform law's attempt to hold insurers accountable. In addition to revealing their intentions to customers, insurers also must face a rate review. Once the insurer submits its proposal for a rate increase, a panel of insurance experts will review it and determine whether it's justified.

The review panel won't be able to force an insurer to back down from a rate increase. But, according to HHS, rate reviews work. Its website discloses several successful interventions, including recent reviews that have limited rate hikes in Oregon, California, Connecticut and North Carolina.

In most cases, the review panels will be made up by health insurance experts at state agencies. Grants from HHS will finance the process of finding qualified experts in the fields of health care and insurance, as well as fund the review process. If a state still lacks the resources to set up review boards, HHS will step in and help conduct the review.

Things will change slightly this year. Currently, rate increases of 10 percent or more trigger a rate review. In September 2012, states will be able to set their own thresholds based on local health care costs.