Commercial Insurance
Effective regulation of health insurance underwriting and rating practices is essential to ensure availability of affordable coverage, avoid risk selection between the Exchange and the external market, and enable improvements in delivery systems.
The ACA creates new standards for health insurance underwriting and rating practices. Primary responsibility for enforcing most of these standards falls to the states. While insurance regulation is not a new state function, most states will need to increase their scrutiny of insurance rates. States will also need to decide how to structure the individual and small group markets, control adverse risk selection, design reinsurance for high-risk populations, educate consumers, and develop an external review process.
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District of Columbia
On November 20, 2012 HHS released a proposed rule related to
fair health insurance premiums, guaranteed availability, guaranteed renewability, risk pools, and
catastrophic plans.
District of Columbia
The brief, prepared for California by IHPS, identifies and assesses the implications of options to mitigate the additional premium rates the ACA allows insurers to apply to tobacco users.
The premium surcharge for tobacco use can be up to 50% of the premium charged to others, and would not be offset by tax credit subsidies. This could result in both unaffordable premiums for low income individuals and risk selection problems for QHPs participating in the Exchange.
The ACA does allow states to impose alternative stricter standards for such market rules. Therefore, a state could choose to disallow tobacco rating entirely or limit the tobacco-rating factor to lesser amounts.