Public Review of Proposed Health Insurance Rate Increases for the 2016 Coverage Year
CMS posts proposed rates increases of 10 percent or more for 2016 plans
Today, the Centers for Medicare & Medicaid Services (CMS) publicly posted health insurance companies’ proposed rate increases of 10 percent or more for the 2016 coverage year as part of its commitment to transparency and robust rate review. Today’s proposed rate increases were submitted by health insurance companies for health insurance plans inside and outside the Health Insurance Marketplaces in all states using the HealthCare.gov Marketplace enrollment platform and some State-based Marketplaces. CMS has posted these proposed increases to the rate review site at RateReview.HealthCare.gov. Rate review allows for officials, experts, and the public to examine and question why a particular health insurance plan’s yearly increase in its premium is high (10 percent or greater) before it is finalized. The rates posted today will be finalized by October.
“The rate review process kicks off an important set of steps designed to provide consumers and others the opportunity to weigh in on proposed rate increases of 10 percent or more," said Acting Administrator Andy Slavitt. "These specific rates will be subject to vigorous rate review and revision and the final rates consumers will see this Fall will reflect the breadth of choice and competition in the Marketplace.”
Proposed rate increases published today are insurance companies’ initial requests, but because of the rate review process and increased competition in the Marketplaces, proposed rates often change before becoming final. This process allows regulators and the public to evaluate whether proposed rate increases are based on reasonable cost assumptions and gives consumers the chance to comment on proposed increases. Marketplace consumers do not have to stay in their same plans if they do not agree with the rate increases or other features of their plan, they have options when they purchase their coverage. For 2015, 29 percent of all HealthCare.gov consumers who re-enrolled in coverage shopped and chose different plans. Also, insurance companies project that most people will be enrolled in plans with proposed rate increases of less than 10 percent.
Rate increases posted today reflect premiums before applicable tax credits. More than 8 in 10 individuals who selected a 2015 Marketplace plan through HealthCare.gov qualified for an average advanced premium tax credit of $263 per person per month. In addition, 8 in 10 consumers in the HealthCare.gov states had access to a plan for less than $100 per month after tax credits and around 7 in 10 had access to a plan for less than $50 a month.
The rate review process is designed to improve the accountability and transparency of the process by which insurance companies set premiums. The Affordable Care Act improved this process by requiring insurance companies to publicly justify proposed rate increases of 10 percent or more in an easy-to-understand format. RateReview.HealthCare.gov was updated today with 2016 proposed rate increases of 10 percent or more for all states using the HealthCare.gov enrollment platform. Proposed rate increases of 10 percent or more in states using their own enrollment platforms will be added to the site later this summer. State insurance regulators operating effective rate review programs are also required to publicly display these materials (or refer consumers to CMS’ website) and have a mechanism for receiving public comments on those proposed rate increases.
Insurance companies must also publicly disclose information on final rate increases of 10 percent or more that are determined to be unreasonable along with a detailed justification for the increase. CMS also posts these justifications directly on our website.
Final rates for all states will be published no later than November 1, 2015.
###