The Academy's Premium Review Work Group sent a letter on Oct. 29 to the Department of Health and Human Services (HHS) evaluating several potential methods for defining or measuring "unreasonable" rate increases. Using three key criteria it developed, the work group evaluated four of the options put forward for consideration by the National Association of Insurance Commissioners (NAIC): (1) the average increase is higher than X percent for a one-year period; (2) the largest increase for any individual is higher than X percent for a one-year period; (3) the average increase is higher than the medical consumer price index plus X percent for a one-year period; and (4) it is likely to result in a loss ratio below the 80 percent or 85 percent medical loss ratio (MLR) requirements.
Legislative and Regulatory Updates
The Department of Health and Human Services on Oct. 29 released its fourth set of Frequently Asked Questions (FAQs) relating to the implementation of market reform provisions in the Affordable Care Act (ACA). The new FAQs address disclosure requirements and cost sharing for grandfathered health plans, as well as employers' interpretation of "essential health benefits" related to the prohibition on lifetime limits.
HHS is expected to release a number of interim final rules and notices related to the implementation of ACA by mid-December. It is anticipated that some of the reported rules and notices to be released will relate to MLR reporting and rebates, the creation of accountable care organizations, and health plan rate reviews.