Going forward, health insurers will need to be more transparent and accountable than ever before when they seek large premium rate increases. This is because, as of today, the Affordable Care Act (ACA) requires that insurers asking for premium increases of 10 percent or more for plans in the individual and small group markets (excluding grandfathered plans) must publicly disclose and justify their requests.

These requests will then be reviewed by either state insurance departments or the United States Department of Health and Human Services (if no effective state rate review program is in place) to determine whether they are unreasonable. If regulators find this to be the case, the request will be publicly labeled as unreasonable and, in some states, denied. To help make this new regulatory authority as useful as possible to consumers, HealthCare.gov will post disclosure information in an accessible and consumer-friendly format beginning in mid-September. You can see a preview of how this disclosure information will look here.

To coincide with the start of the ACA’s rate review process, an amendment to the final rule related to this provision was also published that incorporates an important change from the original final rule that was published back in May of this year. Thanks to efforts by advocates across the country, the amendment to the final rule makes clear that coverage sold through association plans (these can be a way for a self-employed person to access insurance and are often sold to individuals or small groups) is subject to the ACA’s rate review process as of November 1, 2011. While there is some question about whether or not a limited number of association plans may still be able to avoid being subject to this provision, this is still a tremendous victory for consumers. These advocacy efforts have ensured that a significant loophole in the original final rule was largely closed. Congratulations to all!

—Patrick M. Tigue, Senior Policy Analyst