Friday, April 20, 2012

Health insurance under the microscope

Escalating health insurance rates are under the microscope thanks to the Affordable Health Care Act. That's the real name of the law that dismissive pundits call "Obamacare."

Shining light on rate hikes is good for businesses and individuals who struggled for decades to understand why health insurance costs skyrocketed beyond annual inflation rates and beyond their reach.

Compounding the problem, insurance companies refused to explain increases in any meaningful way. Mere policyholders were expected to pay up and shut up or risk ruin with no health insurance at all.

The most common answer to those who questioned health insurance rate hikes was "that's just the way it is." Employers and individuals had no place to turn for help or simply better information.

That changed in September when the Affordable Health Care Act began to force insurance companies to explain and justify annual rate increases that exceed 10 percent. The law can't force companies to turn back rate increases—that's up to state regulatory boards—but it will exert downward pressure.

Last month, the federal Department of Health and Human Services, which administers the law, criticized proposed rate hikes in nine states, including Idaho, calling them "excessive."

The department reports that since its reviews of insurance rate increases began nine months ago, fewer double-digit rate increases have been proposed and premium increases dropped by 4.5 percent.

Whether insurance companies are simply biding their time in the hope that the U.S. Supreme Court will overturn the Affordable Care Act remains to be seen. But for now, the unmasking of health insurance rate hikes is a good start toward a more transparent and fair marketplace.

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