ACA: Empire State Adopts Health Rate Law

Policyholders and members of the public can comment on the rate applications, and the New York department will post relevant comments on its website.

The law is set to take effect Oct. 1.

The new federal Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act, will require health insurers to report the reasons for rates increases along with the percentage of premiums spent on claims, quality of care, taxes, and administrative costs.

“Prior approval will work in tandem with President Obama’s health care reform to make sure insurers’ premium rates are transparent and their reporting is correct,” says New York Insurance Superintendent James Wrynn.

The New York Health Plan Association, Albany, N.Y., has criticized efforts to impose prior-approval requirements on health insurers in the state, arguing that they could lead to arbitrary health rate decisions based on political considerations rather than actuarial reality.

In Massachusetts, which now has prior-approval rules, “the division of insurance capped rates even with the knowledge that four of the five major health plans in Massachusetts experienced operating losses last year,” HPA President Paul Macielak said in a statement earlier this year. “The division’s action will put premiums at levels it knows are insufficient to cover the cost of medical services and will result in losses.”