Regulation of Medical Insurance Premiums – New York « Health Insurance Advisory

Welcome to the New Healthcare Law Center and State News

new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

In this section of the site, you can also obtain the following information specific to your state: available medical insurance options, efforts to regulate medical insurance premiums, healthcare, the individual medical insurance marketplace and the new healthcare law.

Our objective is to help Americans make sense of the new healthcare law by explaining key provisions in plain English and assisting individuals, families and the self-employed in using this information to find and secure affordable medical insurance.

Regulation of Medical Insurance Premiums – New York

Author: Administrator | Feb 24 2011 | New York

 Regulation of Medical Insurance Premiums   New York

The oversight of individual, self-employed and small employer medical insurance happens at the state level. Since every state has its own unique set of regulations aimed at maintaining low cost medical insurance, the laws governing health insurance contracts vary dramatically. Some states have the authority to regulate premiums charged by health insurance companies, while others simply review rates but do not have the authority to reject a premium increase. The laws also differ based on the type of medical insurance policy offered in New York and how the health insurance company filed their contract in the state. Some health insurance policies are filed directly with New York, while others are considered “out-of-state” trust or group association arrangements. The former are generally subject to greater regulation thereby giving New York more control and authority over what benefits must be provided and the premiums that can be charged.

In New York, rates for health insurance policies must generally be filed and approved by the insurance commissioner. This very strict oversight protects individuals against large medical insurance premium increases.

New medical insurance rate review requirements

Since medical insurance premiums have doubled during the past 10 years, the new healthcare law provides for special rate review provisions to help consumers get “better value for their health care dollars.” The Patient Protection and Affordable Care Act require the U.S. Department of Health & Human Services (HHS) to work in collaboration with state insurance commissioners to review “unreasonable increases in medical insurance premiums.”

The new healthcare law also requires medical insurance companies and health plans that propose an “unreasonable” rate increase to provide justification for the increase to HHS, and post the justification on their websites. Additionally, in order to promote price transparency, HHS asked the National Association of Insurance Commissioners (NAIC) to develop a standard rate filing disclosure form that all health plans must use when justifying unreasonable rate increases to HHS and New York. The goal is to ensure that regulators and the public can access the data and justifications in a way that allows for “apples-to-apples” comparisons. “Grandfathered” health insurance policies effective prior to March 2010 (before the new healthcare law was enacted) are exempt from this new rate review requirement.

State grants to support review of medical insurance premiums and rate increases

Lastly, PPACA provides a pool of $250 million in grant funding for state insurance departments to support an enhanced review of medical insurance rates and premium increases. It should be noted that PPACA does not alter New York’s existing regulatory authority over health insurance rates and premium increases.

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