Oklahoma is Cracking Down on Unreasonable Health Insurance Premium Hikes
For too long, insurance companies in many States have increased health insurance premiums with little oversight, transparency, or public accountability. Some States have both the authority and the capacity to review insurers’ proposed health insurance premium increases. Just 26 States and the District of Columbia have the authority to reject a proposed increase that is excessive, lacks justification or exceeds certain standards. Many do not and some who have the authority lack the right tools to exercise that authority to reject excessive premium increases. This lack of authority and resources for States has unfortunately contributed to unjustified premium increases. Health insurance premiums have doubled on average over the last 10 years, much faster than wages and inflation, putting coverage out of reach for millions of Americans and business owners.
The Affordable Care Act provides States with $250 million in Health Insurance Premium Review Grants over five years to help states like Oklahoma help transform the way they review proposed health insurance premium increases, take action against insurers seeking unreasonable rate hikes, and ensure consumers receive value for their premium dollars.
On August 16, the Department of Health and Human Services announced the award of $46 million in the first round of these grants, including $1 million for Oklahoma. The following is a general summary of how Oklahoma intends to use its funding:
- Additional Legislative Authority: Oklahoma will seek statutory changes to provide specific authority for rate review including approval authority during the 2011 legislative session.
- Improve the Review Process: The State conducts limited rate review activities. HMOs and small group filings are required, however individual and large group products are not required to file. Oklahoma has the authority to require all rates to be filed. The State will use funds to expand activities to align with the existing authority for rate review in the State, improve processes, systems and pursue additional authority if determined necessary.
- Increase Transparency and Accessibility: Oklahoma currently provides consumers access to health insurance premiums filings upon request via mail or by allowing viewing at the department's office. The State intends to create a consumer website to post the information on health insurance premium review. In addition, Oklahoma plans to create consumer education materials including a report on the health insurance market in the State for consumers and is considering a consumer Ombudsman program.
- Develop and Upgrade Technology: Oklahoma will support data collection and reporting and establish a data center to compile and publish fee schedule information.
The Health Insurance Premium Review Grants are one element of a broad effort under the Affordable Care Act to reduce the unsustainable rates of increase proposed by some insurers today. Additional resources from this $250 million program for rate review will be available in subsequent years to further strengthen State health insurance premium review procedures.