Review of Insurance Rates

Health insurance premiums have risen rapidly, straining the pocketbooks of American families and businesses for more than a decade. Many times, insurance companies have been able to raise rates without explaining their actions to regulators or the public or justifying the reasons for their high premiums. In most cases, consumers receive little or no information about proposed premium increases, and aren’t told why companies want to raise rates.

The Affordable Care Act brings an unprecedented level of scrutiny and transparency to health insurance rate increases. The Act ensures that, in any State, large proposed increases will be evaluated by experts to make sure they are based on reasonable cost assumptions and solid evidence. This analysis is expected to help moderate premium hikes and provide those who buy insurance with greater value for their premium dollar. Additionally, insurance companies must provide easy to understand information to their customers about their reasons for significant rate increases, as well as publicly justify and post on their website any unreasonable rate increases. These steps will allow consumers to know why they are paying the rates that they are.

For more information about the rate review program, please visit - Opens in a new window .

Effective Rate Review

HHS works in partnership with states to ensure that all proposed rate increases of 10 percent or more in the individual and small group market are thoroughly reviewed. The Affordable Care Act sets minimum standards for the review of these proposed increases, called effective rate review standards.   If a state lacks the resources or authority to meet these standards and conduct the needed reviews, HHS conducts the rate review while continuing to make resources available to states to strengthen their rate review process.

Rate Review Grants

To help states strengthen and improve their rate review processes, the Affordable Care Act provides states with $250 million in Health Insurance Rate Review Grants.  These grants give states much needed resources to build on their historical primary role of reviewing proposed health insurance premium increases and to hold insurance companies accountable for unjustified premium increases.