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An Advocate’s Guide to Health Insurance Rate Hikes: What You Can Do To Protect Individual Market Consumers

Health insurance premium increases have caused many individuals and families to move to plans with higher cost-sharing or drop coverage all together. The high cost of coverage has gained nationwide attention as insurers continue to impose double-digit rate hikes, particularly on those who purchase coverage in the individual market, without the help of an employer.
Why do insurers raise rates? Are they required to justify rate hikes, and if so, how? How can advocates protect consumers from unreasonable or unjustified increases?
This Guide aims to answer these questions. You’ll find information to help you understand how insurers develop premiums, and help you evaluate insurers’ rate filings – those highly technical documents that insurers submit to regulators in most states to show how they came up with a rate increase. You can read Consumers Union recommendations for improving state rate review so you can push for changes in your state. And you’ll find suggestions to help you effectively participate in a rate review process.
Now is the time to advocate for closer scrutiny of rate hikes and more open, participatory rate review processes. Rate review authority remains primarily in the states, and the federal Patient Protection and Affordable Care Act (PPACA) provides grants to states to improve their health insurance rate review. Forty-five states and the District of Columbia have accepted grant funds so far with the intent to improve their rate review through measures such as collecting more data from insurers, hiring more agency staff to conduct reviews, releasing more information about rate increases on state agency websites, and in some cases, enacting new legislation with stronger rate review authority. More than 14 million consumers buy coverage in the individual market and many more are expected to access this market after health reforms take full effect in 2014. They need strong advocates to ensure that rate review rules and processes protect them from unjustified rate hikes.
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