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Health Insurance Rates and Rate Review

Leonard Davis Institute of Health Economics – This Data Brief was written by Scott E. Harrington, PhD and Janet Weiner, MPH.

“Health insurers participating in the new Marketplaces are filing rates for 2015 during the next few months. A few states have already released data on proposed rates. There is substantial economic, policy, and political interest in the magnitude of proposed rate changes. This brief provides background for understanding the economic drivers of proposed rates, state and federal rate review authority, the effects of rate changes on Marketplace enrollees and federal spending on premium credits, and the economic and political dynamics of the rate review and approval process…Premium rates for individual and small group health insurance generally must be filed with  and often must be approved by state regulators, and the ACA (Affordable Care Act) requires health insurers to justify unreasonable rate increases. While individual market rates in the Marketplaces for 2014 received considerable attention when they were released by the federal government and the states in the latter half of 2013, the rate filing approval process received relatively little public discussion. The discussion and debate promises to be broader and earlier this year, as insurers file their 2015 rates. A number of states have released these proposed rates, prompting highly partisan dialogue about what they mean. Many ACA opponents will claim that any non-negligible rate increases are further proof of an ACA train wreck. Many ACA supporters will claim that any percentage rate increases below double digit levels prove that the ACA is working. The facts, however, will be far more complex. Here we provide some context for understanding the proposed rates and the review process.”

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