Health insurance rate reviews under federal purview Sept. 1 Posted: May 24th, 2011

The Department of Health and Human Services (HHS) announced that health insurance companies will be subject to new rate review rules on Sept. 1. Under the regulation, health insurance rate increases exceeding 10 percent will be subject to review by either the federal or a state government.

"Strong and transparent rate review processes are necessary to help bring down costs for consumers," said Center for Consumer Information and Insurance Oversight director Steve Larsen in a statement. "Rate review will ensure that increases are based on reasonable estimates and real-time data on medical cost trends and health care utilization."

HHS oversight is mandated by the federal health reform legislation. While the federal government has determined that all health insurance rates greater than 10 percent will be reviewed in the coming year, states will be able to determine their own review thresholds beginning September 1, 2012.

In addition, the new federal regulation requires that health insurance companies subject to government review provide consumers with details regarding the rate increase. Insurers must post an easy-to-understand explanation of the reasons for the hike on their website as well as the HHS site.