Insurers to be required to disclose, justify double-digit rate increases

The Obama administration announced earlier this week that it would require health insurance companies to disclose and justify any rate increases of 10 percent or greater, starting next year (Source: “Health Insurers to Be Required to Justify Rate Increases Over 10 Percent,” New York Times, Dec. 22, 2010).

Kathleen Sebelius, the secretary of health and human services, said the reviews would “help rein in the kind of excessive and unreasonable rate increases that have made insurance unaffordable for many families.”

The Affordable Care Act calls for annual review of “unreasonable increases in premiums for health insurance coverage,” but did not specify a standard for determining  at which level an increase should be deemed “unreasonable.”

Starting in 2012, the federal government will set a threshold for each state, reflecting trends in its insurance and medical costs.