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Insurers seek big rate hikes less often, feds report

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By The Washington Post
Saturday, Feb. 23, 2013, 9:36 p.m.
 

WASHINGTON — Health insurers are seeking double-digit increases in rates for individuals much less frequently than four years ago, according to a government report released on Friday.

Researchers at the Department of Health and Human Services examined data from 15 states and found that in 2010, 74 percent of the time, health insurers sought an increase of more than 10 percent in the rates they charge for individual health coverage. By 2012, double-digit increases constituted just 35 percent of rate hike requests.

Preliminary data for 2013, which covers 10 states, show that only 14 percent of rate-increase requests call for a double-digit bump.

The study covers rate increases that could affect 2.6 million and 2.7 million people, about one-third of the overall individual insurance market.

While the study is not comprehensive, researchers consider it a good indication of the direction of health care costs in this market.

The Health and Human Services report credits the decline to a provision of the Affordable Care Act that gives states more power to scrutinize rate increases. Beginning in 2011, the health care law required state regulators to review each proposed rate increase and determine whether it is “reasonable” or “unreasonable.”

“The sharp drop in requests for increases of 10 percent or more is most likely the result of the increased scrutiny,” the report states.

Another possibility: There's been a big slowdown in the overall rate of health care cost growth. After years of growing faster than the economy, starting in 2009 health care costs began to grow at a slower rate, now often equaling the growth rate of the economy.

HHS researchers dismissed this contention, noting they did not find a similarly large drop in the rate increases being requested by insurers in the group market, which includes policies purchased by employers.

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