Health insurance companies attempting to get rate increases of ten percent or more will face increased scrutiny beginning in September under rules the Obama administration finalized Thursday.
States, or in some cases the federal government, will review the premium increases and insurers will have to justify increases regarded as unreasonable. The law doesn’t give the federal government the ability to reject increases, but quite a few state regulators have it.
The guidelines, required by the health care law introduced last year, also require insurers to provide a broad overview of what they will spend the money on, which includes just how much would go to medical providers, profits and administrative costs.
In the past year, California insurers withdrew double-digit increases right after regulators located mathematical errors in the companies’ data. But a different insurer, Anthem, moved ahead this month with increases of up to 16%, even after the increase was deemed unreasonable.
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