Some skeptical of insurance-rate reporting mandates

Insurance industry representatives in Pennsylvania say a new insurance-rate reporting measure will do little to keep rates in check.

“My experience with rate review … is that particularly in relatively competitive markets they tend to be valid rates,” said Sam Marshall, president of the Insurance Federation of Pennsylvania. “The real question is what is anybody doing to hold down costs, because that’s what drives rates.”

Starting Thursday, insurance companies in Pennsylvania will have to report rate increases of 10 percent or more in small-group plans to federal reviewers. Those reviewers will post the changes online and review them to see if they are justified.

An Independence Blue Cross representative said the insurer deems the additional review largely unnecessary, echoing that drug costs and chronic illness are the real reasons premiums keep rising.

Some consumer advocates say the reporting requirements are a step in the right direction, but they lack teeth because they do not give the federal government regulatory power to do anything about rate hikes.

The measure is an effort to add transparency and allow state insurance commissioners to call out rate increases deemed unreasonable. According to the U.S. Department of Health and Human Services, similar reviews have resulted in significant reductions of proposed increases in North Dakota, Connecticut, California and Rhode Island.

The health-care law requires the federal review in 10 states whose own review systems did not meet standards.