The federal government on Thursday finalized a plan to tighten scrutiny on big proposed health insurance premium hikes.
Starting in September, individual and small-group rate increases of 10 percent or more will be reviewed by either state or federal officials, with state regulators having the primary responsibility.
The federal government will not have the authority to reject rate increases, but it will review them in states that lack the resources or authority for reviews, the Department of Health and Human Services said in a statement. The department has awarded $44 million in grants to states to help them strengthen oversight of insurers.
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If an increase is deemed unreasonable, the finding will be posted on websites for HHS and the insurer.
The final regulation, which is part of the broader health care overhaul that aims to cover millions of uninsured people, largely reflected the proposed rule HHS first announced late last year.
HHS Secretary Kathleen Sebelius said in a conference call Thursday the new guidelines will ensure that a big rate hike in any state "is scrutinized to make sure it's reasonable and justified."
Many individual insurance customers and companies that buy small-group coverage for their workers have been jolted by steep premium hikes in recent years. HHS said the rate reviews will help lower insurance costs by moderating premium hikes.
But insurers have said repeatedly that the spiraling costs of hospital care and other medical services are the main factors behind premium hikes.
"Focusing on health insurance premiums while ignoring underlying medical cost drivers will not make health care coverage more affordable for families and employers," said a statement from the industry trade group America's Health Insurance Plans.
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