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Rate Review: Cutting Costs for Consumers and Small Businesses – Chapter One

Learn more about how the Affordable Care Act is working to control health insurance premium hikes.

Today, consumers got some good news when a big insurance company – Blue Shield of California – announced it will be returning $295 million to consumers and the community by the end of the year. This announcement will provide some much needed relief to families who have seen their premiums increase in recent years. And it’s the fourth positive announcement we’ve heard this week alone about health insurance premiums.

Before the Affordable Care Act became law, many insurance companies could raise your premiums without any transparency or accountability. If you wanted to know why your rates were going up, they were under no obligation to tell you.

Thanks to the Affordable Care Act, that’s all changing. Starting September 1, 2011, in every State and for the first time ever, insurance companies are required to publicly justify their actions if they want to raise rates by 10 percent or more. The Affordable Care Act also included $250 million to help States strengthen their rate review procedures so they can successfully fight high premium hikes and help keep costs under control.

Making the insurance marketplace more transparent and holding insurance companies accountable is good for consumers. Accountability and transparency can help drive costs down and give you more information about your health insurance choices.

We’ve known for a long time that rate review works, but this week alone, we’ve received more news about how rate review is helping States fighting high premium hikes and saving money for consumers:

  • In New Mexico, the State Insurance Superintendent rejected Blue Cross and Blue Shield’s plan to raise rates by 9.9 percent.
  • In New York, the State Superintendent of Financial Services is requiring insurers justification of high rate hikes to be made available to the public for the first time.
  • In California, Kaiser Permanente is decreasing premiums for small businesses and providing credits to those who had paid higher rates. The premium credits will total $13.7 million.

These are just three examples that we learned about this week. We expect to hear more stories like this in the future. And when we do, we’ll post them here on the White House blog.

You can also visit to see if any insurers in your State have proposed an increase of 10 percent or more and why.  And if you don’t think the reason for the increase is justified, you can submit comments by emailing

Nancy-Ann DeParle is Assistant to the President and Deputy Chief of Staff for Policy