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Health Insurance Premium Hike Rejected

Learn more about the Affordable Care Act and efforts to stop unreasonable health insurance premium increases.

On Friday, consumers in Connecticut got some good news when the state insurance commissioner rejected Anthem Blue Cross and Blue Shield’s plan to raise insurance premiums by 20 percent.  The premium increase would have raised rates for 48,000 consumers.  After a thorough look at the facts, Connecticut officials determined that the rate hike was “excessive” and that no rate increases would be necessary. You can read media coverage of the Connecticut decision here.

The work in Connecticut shows the power of premium review – a process used by states to evaluate and approve proposed health insurance premium increases. Today, some states have stronger premium review processes than others, so the Affordable Care Act included $250 million in grants to states that will help them strengthen their premium review efforts and protect consumers. We’ve already seen premium review hold down rate hikes in California, Massachusetts, Maine and now, Connecticut and we expect to hear more good news from other states in the months ahead.

Supporting state efforts to crack down on premium hikes is just one of the steps the Affordable Care Act takes to help control health care costs for families nationwide. In addition to setting up exchanges -- new competitive health insurance marketplaces where Americans can shop for affordable coverage options – the law:

  • Requires insurance companies to publicly justify any unreasonable premium increases beginning in 2011.
  • Requires insurance companies to spend at least 80 percent of premium dollars on health care instead of overhead, salaries or administrative expenses, in 2011. If they don’t, they will be required to provide a rebate to consumers.
  • Insurance companies who unreasonably raise rates between now and 2014 may be denied the opportunity to participate in the new exchanges.

The Affordable Care Act is making our health care system more transparent, giving consumers new rights and benefits and helping states control costs for families. We are committed to implementing the law quickly and carefully and delivering the benefits of reform to the American people.

Nancy-Ann DeParle is the Director of the White House Office of Health Reform