HHS releases final rule on insurance rate hikes

Secretary of Health and Human Services Kathleen Sebelius released yesterday a final rule that requires health insurers to justify proposed rate increases of greater than 10 percent (Source: “Insurers Told to Justify Rate Increases Over 10 Percent,” New York Times, May 19, 2011).

Insurers protested the 10 percent threshold when it was first proposed in December, saying the arbitrary line would brand a majority of rate increases as presumptively unreasonable. However, the 10 percent requirement remained in the final rule.

Beginning in September 2012, HHS will set separate thresholds for each state, depending on trends in health care costs and insurance rates.