CHA News Article

HHS Releases Rate Review Annual Report

The U.S. Department of Health & Human Services (HHS) has released its Rate Review Annual Report for calendar year (CY) 2013, the third such report issued under the Affordable Care Act (ACA). The report is based on CY 2013 data submitted by states receiving rate review grants — supplemented by data that are available on these states’ websites — and state website data for several non-grantee states. The report uses an analysis of data from 40 states in the individual market and 37 states in the small group market to estimate the impact of the Rate Review Program and the Rate Review Grant Program on premiums in the individual and small group markets. It focuses on the impact of these two provisions under the ACA to assess trends in rate increases in the individual and small group markets. In addition, the report uses data from the Medical Loss Ratio (MLR) Program to estimate consumer savings resulting from these provisions of the ACA. 

Key report findings include:

  • Rate review reduced total premiums by an estimated $290 million in the individual market for all states.
  • In the individual market, the average requested rate increase was reduced by 8 percent for the 40 states examined.
  • Rate review reduced total premiums by an estimated $703 million in the small group market for all states.
  • In the small group market, the average requested rate increase was reduced by 11 percent for the 37 states examined.
  • For both markets, the total estimated reduction in premiums for 2013 was nearly $1 billion ($993 million).
  • Together with the 2013 MLR rebates of $250 million for the individual and small group markets, this estimated reduction in premiums amounts to $1.2 billion of savings to consumers in 2013 due to the ACA’s rate review and MLR provisions.
  • In 2012, the ACA’s MLR and rate review provisions accounted for $1.6 billion in rebates and premium reductions. The combined amount of rebates and reduction in premium amounts for 2013 and 2012 was $2.8 billion.

The Rate Review Program, created under the ACA, requires issuers to submit for review by HHS and/or the relevant state any proposed rate increase of 10 percent or more and to justify that increase. The Rate Review Program began in September 2011 and continued through April 2013, requiring insurance companies to document, submit for review and publicly justify rate increases of 10 percent or more. For rate filings for plan years 2014 and later, issuers must submit data for all of the plans in their risk pools in a single rate filing to both their state and the Centers for Medicare & Medicaid Services. Using both historic and new filing and review methods, HHS will continue to monitor the long-term trend of requested and implemented rate increase in the health insurance market.

To review the full report, visit http://aspe.hhs.gov/health/reports/2014/RateReview/rpt_RateReview.pdf.

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