A provision of the Patient Care and Affordable Care Act that requires insurance companies to seek approval before increasing premiums more than 10% saved 6.8 million consumers an estimated $1.2 billion on health insurance premiums in 2012, according to a recent report from the Department of Health and Human Services (HHS).
The federal rate review provision, which began on Sept. 1, 2011, requires insurance companies to submit for review and justify any proposed health insurance premium increase of 10% or more. HHS provides states with health insurance rate review grants to enhance rate review programs and bring greater transparency to the process. To date, 46 states, the District of Columbia and five territories have been awarded grants.
The report stated that approximately $1.2 billion was saved over the past year in the individual and small group markets.
“Thanks to the health care law, we are seeing that holding insurance companies accountable is leading to increased competition and saving billions of dollars for consumers across the country,” Kathleen Sebelius, secretary of HHS, stated in a news release. “This type of competition and transparency will continue in the health insurance marketplace, or exchanges, where Americans will be able to shop for and compare plans side-by-side to find the one that fits their needs and budget.”