FOR IMMEDIATE RELEASE September 1, 2011 – Today, health insurers seeking to increase their rates by 10 percent or more must submit their request to state or federal reviewers to determine whether they are reasonable or not. This rate review program, created by the Affordable Care Act, will bring greater transparency, accountability, and, in many cases, lower costs for families and small business owners who struggle to afford coverage.

In a growing number of states, regulators now have the authority to deny or reduce rate hikes found to be excessive. Insurers that insist on going ahead with double-digit rate increases are required to post their justifications on their website, and state and federal regulators will post them as well.

“For far too long, families and small employers have been at the mercy of insurance rate increases that often put coverage out of their reach. Rate review will shed a bright light on the industry’s behavior and drive market competition to lower costs,” said Kathleen Sebelius, Secretary of Health and Human Services. “We are pleased to team with states to bring this important new protection to consumers and employers.”

As of today, insurers proposing double digit increases will have to provide clear information that indicates what factors are causing proposed increases. Experts will closely examine information about the underlying cost trends in health care to flag instances when insurance companies are unjustly raising costs. This means consumers will no longer have to take the word of their insurance company; they will have an independent expert reviewing their proposed rate increase.

Starting mid-September, consumers in every state can go to HealthCare.gov to view easy-to-access, consumer-friendly disclosure information explaining proposed increases that are 10 percent or higher than last year’s rates. Consumers will see a summary of the key factors driving rate increases and an explanation provided by insurance companies for why the proposed increase is needed. And, for the first time, consumers in every state will also be given the ability to comment on large proposed rate increases.

“Thanks to the Affordable Care Act consumers no longer have to navigate the health insurance market blindly and on their own,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight. “The next time your insurance company tries to raise your premium by double digits, it will have to give you and rate review experts a good reason – or be labeled as unjustified, or in some states denied.”

States continue to have the primary responsibility for reviewing insurance rates. Because many states have lacked the resources needed to perform strong rate review, the Affordable Care Act provides $250 million in Health Insurance Premium Review Grants to states over five years. These new resources will improve how states review proposed health insurance rate increases and hold insurance companies accountable for unjustified premium increases. States and territories are already using $48 million in rate review grants, and HHS has made an additional $200 million available to states and territories to strengthen and improve their rate review processes.

“Thanks to our Affordable Care Act grant funds, our rate reviews are more in-depth, and we recently proposed to use future grant funds to incorporate public hearings into our rate reviews,” Oregon Insurance Division Administrator Teresa Miller said. “We have already received valuable feedback from consumer groups and look forward to continuing to improve our rate review process”

For more information on rate review and today’s announcement, please visit:http://www.healthcare.gov/news/factsheets/ratereview09012011a.html.

For more information on significant State achievements with rate review, please visit:http://www.healthcare.gov/news/factsheets/ratereview09012011b.html

(Kansas City, MO) 1 Aug 2011 – Employers, according to Lockton Benefit Group president Michael Brewer, are remarkably committed to their employees. So much so, says Brewer, that even amidst the uncertainty of health reform and the opening of new insurance exchanges in 2014, most of Lockton’s clients who offer health coverage today plan to continue to offer group health insurance. However, the costs and administrative burdens of health reform could cause these same businesses to cut full-time jobs or limit their abilities to expand. That’s exactly what Brewer told lawmakers in Washington D.C. on July 28, 2011 while speaking at a hearing on the impact of last year’s healthcare reform law, for a Subcommittee of the Oversight and Governance Reform Committee of the U.S. House of Representatives.

Brewer testified that while more than 80 percent of employers responding to a recent Lockton survey about health reform indicated they would like to continue to offer group insurance, these employers still struggle with the cost and complexity of group plan administration, and that thus far the healthcare reform law has increased-not mitigated-costs and administrative burdens. Brewer told Congress, “One of our employers simply stated, ‘We operate our business on paper-thin margins and any additional government mandated costs will force us to either close the business or reduce the hours of our full-time employees.’ Now we know this is not the intent of health reform, but this is the result of health reform and this is the reality of health reform for many employers: job loss and reduction in employment opportunities,” said Brewer.

Only about 20 percent of employers, the Lockton survey indicated, will consider terminating their group health plans when the insurance exchanges open in 2014. But Brewer told the subcommittee that the other 80 percent overwhelmingly said the reason for their current commitment is a belief that they must offer health insurance to attract and retain the kind of employees they need. Brewer said that as the dominoes begin to fall-as other employers exit the group health marketplace, and this 80 percent of employers that now say they plan to continue to offer coverage begin to see that they do not have to offer health insurance to attract and retain the talent they want-there is likely to be a more substantial migration of employers out of the group insurance market. Brewer warned Congress that this could significantly skew Congressional Budget Office estimates on the number of Americans who are expected to seek federal subsidies to purchase insurance in the new insurance exchanges.

Click to review Brewer’s written testimony, provided in advance to the House Subcommittee, or click to view avideo of the Committee hearing (Brewer’s testimony begins at 34 minutes into the hearing.)

Click to view more informationabout Lockton’s employer survey results.

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About Lockton

More than 4,100 professionals at Lockton provide more than 15,000 clients around the world with insurance,benefits, and risk managementservices, offering an uncommon level of client service. From its founding in 1966 in Kansas City, Missouri, USA, Lockton has grown to become the largest privately held insurance broker in the world and 9th largest overall. Independent researcher Greenwich Associates awarded Lockton its 2011 Service Excellence Award for risk management for large companies.  Business Insurancehas twice recognized Lockton as a “Best Place to Work in Insurance.” You can learn more at www.lockton.com