Health Reform WK-EDGE ‘Unreasonable’ premium increases require ‘prominent posting’ of justification
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Monday, October 3, 2016

‘Unreasonable’ premium increases require ‘prominent posting’ of justification

By Harold Bishop, J.D.

If a health insurance issuer offering non-grandfathered health insurance coverage in the individual or small group market through or outside of the Marketplace implements a rate increase that has been determined to be unreasonable by CMS, or by a state with an effective rate review program, the health insurance issuer must "prominently post" the required rate filing information and its Final Justification for implementing a rate increase. The posting must occur within 10 days after the implementation of the rate increase or the health insurance issuer's receipt of the final determination by CMS or the state that the rate is "unreasonable." The Final Justification must also be sent to CMS within the 10 day period (CMS Letters, September 26, 2016).

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) brought scrutiny and transparency to health insurance rate increases. Specifically, section 1003 of the ACA, which amended section 2794 of the Public Health Services Act (42 U.S.C. §300gg–91 et seq.), requires Secretary of HHS, in conjunction with the states, to establish an annual review process that requires insurers to submit a justification for any "unreasonable" premium increase prior to implementation. The insurers are also required to "prominently post" information regarding premium increases on their websites.

Content of posting. According to a guidance bulletin issued by CMS’ Center for Consumer Information and Insurance Oversight (CCIIO), the posting must include: (1) the information made available to the public by CMS and described in 45 C.F.R sec. 154.215(h); (2) CMS' or the state's final determination and brief explanation described in 45 C.F.R. secs. 154.225(a) and 154.210(b)(2); and (3) the health insurance issuer's Final Justification for implementing the increase. The posted information must be available to the public on the insurance issuer’s web site for at least three years.

The information made public by CMS, which must be included in the insurance issuer’s web posting includes: (1) the information contained in Part II of each Rate Filing Justification; (2) the information contained in Parts I and III of each Rate Filing Justification that is not a trade secret or confidential commercial or financial information as defined in HHS's Freedom of Information Act regulations (45 C.F.R. sec. 5.65); and (3) a disclaimer that explains the purpose and role of the Rate Filing Justification.

Content of Final Justification. CMS stresses that while the information in the Final Justification must be consistent with the information submitted in the Rate Filing Justification supporting the rate increase, the Final Justification should not simply restate the rationale that was included in the rate filing. Instead, the Final Justification should include a thorough explanation and analysis of the issuer’s decision to implement a rate increase determined to be unreasonable. This explanation should include responses to concerns raised by CMS or the state in its final determination.

"Prominently post" defined. For the required information to be "prominently posted," it must be: (1) viewable on the issuer's public web site through a clearly identifiable link or tab located on the home page, without requiring an individual to create or access an account or enter a policy number; and (2) easily discernable which rate filing information applies to a specific product in a specific market and year.

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