The Affordable Care Act brings an increased level of scrutiny and transparency to health insurance rate increases. The Affordable Care Act ensures that, in any state, proposed rate increases will be evaluated by experts to make sure they are based on reasonable cost assumptions and solid evidence. This analysis is expected to help moderate premium hikes and provide those who buy insurance with greater value for their premium dollar. Additionally, health insurance issuers must provide easy to understand information to their customers about their reasons for rate increases, as well as publicly justify and post on their websites any rate increases determined to be unreasonable. These steps will allow consumers to better understand the basis for the rates they are paying.
Rates for qualified health plans (QHPs) in the Individual Marketplace or SHOP will be reviewed for reasonableness, as well as compliance with market rating reforms under the Affordable Care Act.
Many states have been classified as having an Effective Rate Review Program for all or some markets. In other states or markets without an Effective Rate Review Program the review will be accomplished by the Centers for Medicare & Medicaid Services (CMS). This is good news for agents, brokers, and consumers because rates (and rate increases) for QHPs will be reviewed by independent experts. In this topic, you will learn about reviewing health plan premiums and the variances in those rates.
Under the Affordable Care Act, most increases in health plan premiums are subject to monitoring. Health insurance issuers must tell consumers when they want to increase insurance rates for individual or small group policies. This process, together with review of rates as part of the qualification process for health plans to be offered by Marketplaces, will enhance consumer protection through increased transparency. The rate reviews of increase requests, called effective rate reviews, will be conducted by independent state or federal experts.
Effective Rate Review
The Department of Health and Human Services (HHS) (through CMS) works with states to ensure that all proposed rate increases in the individual and small group markets are thoroughly reviewed. The Affordable Care Act sets minimum standards for the review of these proposed increases, called effective rate review standards. If a state lacks the resources or authority to meet these standards and conduct the needed reviews, HHS conducts the rate review while continuing to make resources available to states to strengthen their rate review process.
Next Topic: Rate Variations
Agents and Brokers are required to be trained to assist consumers with the application and decision making process. Using an Agent to enroll in a ObamaCare Health Plan will be the primary choice of many americans. After all agents have the inside track on companies and their promptness to handle claims and pay benefits in atimely fashion.
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