New law to promote affordable medical insurance- Will it work? « 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.

New law to promote affordable medical insurance- Will it work?

Health insurance companies are now required to post explanations of premium increases of 10% or more and submit them for review to state and federal regulators. This mandate is required by the new healthcare law. By requiring health insurance companies to justify premium increases, there is greater price transparency and increased public pressure to keep rates lower in order to avoid bad press.

The new law still has a loophole though. Even if government officials consider the premium increase unjustified, the law does not give state and federal regulators the power to block rate hikes unless the state previously had authority to regulate health insurance rates.

Prior to this new rule, only the states below had existing regulations that required all health plans, HMOs, Blue Cross Blue Shield Plans and health insurance companies to submit rates for approval before using:

  • Arkansas
  • Colorado
  • Connecticut
  • Delaware
  • District of Columbia
  • Florida
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Nebraska
  • Nevada
  • New Hampshire
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Tennessee
  • Vermont
  • Virginia
  • Washington
  • West Virginia

Note:

  • Most of the above states “deem” health insurance rates approved in 30 to 90 days unless the state regulators formally object prior to that time.
  • Each state’s authority over health insurance rates can vary by type of medical insurance plan. Group Association health insurance plans, for example, that are not filed directly with the state because they are domiciled in another state may not have to file rates for approval.

The Department of Health and Human Services (HHS) will rely on state insurance regulators to scrutinize medical insurance rates. However, HHS will handle oversight of health insurance rates in states where it has determined that state supervision is inadequate. These states include:

  • Alabama
  • Arizona
  • Louisiana
  • Missouri
  • Montana
  • Pennsylvania
  • Virginia
  • Wyoming

HHS will be working with states to set individual state-by-state thresholds for health insurance premium rate hikes that will require public explanation from health insurance companies.

Looking for affordable medical insurance? Our online health insurance quotes enable you to shop and perform side by side comparisons of medical plans offered by leading insurance companies in your state. Get started today!

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