Desperate White House looking to block double digit Obamacare rate increases

On the heels of the pro-Obamacare Kaiser Foundation's study showing consumers can expect double digit rate increases for Obamacare insurance plans, the White House is digging in to a political slush fund that gives money to state insurance regulators for the purpose of "rate reviews." These reviews examine requests by insurance companies for rate increases. The money will allow states to hire "outside experts" who will go over the suggested rate increases with a fine tooth comb, looking to disprove the company's need for big increases.

The Hill:

The federal health department announced Wednesday that it will dole out about $22 million to boost state-level "rate reviews," considered one of the strongest weapons against premium increases. 

Under the system, health insurers are required to justify rate increases to state insurance departments, some of which have the power to reject “unreasonable” increases. With the new funding, federal health officials hope states can hire outside insurance experts to dig deeper into the proposed rates and prove the hikes are unjustified.

The administration’s latest push to control healthcare premiums comes just as proposed double-digit rate hikes make headlines nationwide.

Premiums for the most popular ObamaCare plans are expected to rise by an average of 11 percent next year, according to research by the Kaiser Family Foundation released Wednesday.

The new federal grants, described as a way to “hold insurance companies accountable for unjustified hikes” are likely to inflame an already tense relationship with health insurers.

Healthcare marketplaces under ObamaCare have had a tumultuous year. Many companies are already dealing with far less than expected in government help because of the shortfall to the ObamaCare risk-sharing funding pool. Several companies are now taking legal action to reclaim the funds.

Losses have been so severe for some companies that one of the nation’s largest insurers, United HealthCare, announced it would be pulling out of the exchanges altogether in 2017.

Insurers have been increasingly vocal about concerns that the Obama administration is not doing enough to steady the marketplace. 

ObamaCare executives are under intense pressure to keep premium hikes in check this year. Most customers will get the first notice of their new premium costs in November, just before Election Day.

In the last week, federal health officials have already announced a plan to help stabilize the risk-sharing pool and hosted a conference in Washington, D.C., to help share "success stories" for companies that are staying afloat under the law.

Rate review, which was broadened under ObamaCare, is seen as an important tool for states battling to keep premiums low.

The expansion of that program, particularly on the federal level, has been strongly opposed by a major trade group for insurers, America’s Health Insurance Plans (AHIP). 

AHIP spokesman Clare Krusing said Wednesday she hadn't reviewed full details of the administration's plan but strongly warned against turning the program into "a political football."

Insurance companies say the rate reviews will find that the Obamacare insurance market is not performing as advertised and that the double digit increases are necessary for their survival. There are simply too many older, sicker customers signing up for Obamacare plans for the companies to make a profit.

It will be interesting to see which states receive part of this $22 million political slush fund. The funds should be available for any state that feels the need for it. But the cash will almost certainly go to states where the increases are the largest. That's what makes this a political issue and not one of promoting good insurance practices.

On the heels of the pro-Obamacare Kaiser Foundation's study showing consumers can expect double digit rate increases for Obamacare insurance plans, the White House is digging in to a political slush fund that gives money to state insurance regulators for the purpose of "rate reviews." These reviews examine requests by insurance companies for rate increases. The money will allow states to hire "outside experts" who will go over the suggested rate increases with a fine tooth comb, looking to disprove the company's need for big increases.

The Hill:

The federal health department announced Wednesday that it will dole out about $22 million to boost state-level "rate reviews," considered one of the strongest weapons against premium increases. 

Under the system, health insurers are required to justify rate increases to state insurance departments, some of which have the power to reject “unreasonable” increases. With the new funding, federal health officials hope states can hire outside insurance experts to dig deeper into the proposed rates and prove the hikes are unjustified.

The administration’s latest push to control healthcare premiums comes just as proposed double-digit rate hikes make headlines nationwide.

Premiums for the most popular ObamaCare plans are expected to rise by an average of 11 percent next year, according to research by the Kaiser Family Foundation released Wednesday.

The new federal grants, described as a way to “hold insurance companies accountable for unjustified hikes” are likely to inflame an already tense relationship with health insurers.

Healthcare marketplaces under ObamaCare have had a tumultuous year. Many companies are already dealing with far less than expected in government help because of the shortfall to the ObamaCare risk-sharing funding pool. Several companies are now taking legal action to reclaim the funds.

Losses have been so severe for some companies that one of the nation’s largest insurers, United HealthCare, announced it would be pulling out of the exchanges altogether in 2017.

Insurers have been increasingly vocal about concerns that the Obama administration is not doing enough to steady the marketplace. 

ObamaCare executives are under intense pressure to keep premium hikes in check this year. Most customers will get the first notice of their new premium costs in November, just before Election Day.

In the last week, federal health officials have already announced a plan to help stabilize the risk-sharing pool and hosted a conference in Washington, D.C., to help share "success stories" for companies that are staying afloat under the law.

Rate review, which was broadened under ObamaCare, is seen as an important tool for states battling to keep premiums low.

The expansion of that program, particularly on the federal level, has been strongly opposed by a major trade group for insurers, America’s Health Insurance Plans (AHIP). 

AHIP spokesman Clare Krusing said Wednesday she hadn't reviewed full details of the administration's plan but strongly warned against turning the program into "a political football."

Insurance companies say the rate reviews will find that the Obamacare insurance market is not performing as advertised and that the double digit increases are necessary for their survival. There are simply too many older, sicker customers signing up for Obamacare plans for the companies to make a profit.

It will be interesting to see which states receive part of this $22 million political slush fund. The funds should be available for any state that feels the need for it. But the cash will almost certainly go to states where the increases are the largest. That's what makes this a political issue and not one of promoting good insurance practices.