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CMS Rules on Premium Increases

May.19.2011

HHS has issued a final rule requiring independent review at the state level for proposed premium rate increases of 10 percent or more for individual and small group health insurance plans. HHS will serve in a backup role in states that don't have the resources or authority to review rates. Starting September 2012, the 10-percent threshold will be replaced by state-specific thresholds that reflect the insurance and health care cost trends in each state. The final rule clarifies that HHS will work with states in developing these thresholds. The rule requires insurance companies to provide consumers with information about the reasons for certain rate increases and post the justification for those hikes on their website as well as on the HHS Affordable Care Act website

The regulation issued today finalizes proposed rules issued in December 2010. The final rule has several additions to the proposed rule, including a requirement that states provide an opportunity for public input in the evaluation of rate increases subject to review. HHS is also requesting comment from the public on applying the rule to individual and small group coverage sold through associations.

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Jacinta Alves
Counsel – Washington, D.C.
Phone: +1 202.624.2573
Email: jalves@crowell.com