U.S. Health and Human Services Secretary Kathleen Sebelius applauded the Governor of New York David A. Paterson for the signing of legislation which will authorize the states to review and approve health insurance premiums to limit them from rising.
The new law will require insurers to contact their State Insurance Department before they attempt to institute a rise in their premiums. Sebelius had requested in May that governors and state insurance commissioners examine their levels of authority under state laws to determine whether they have all of the instruments needed to approve health insurance rates before they take effect.
“I applaud New York on its bold move to hold insurance companies accountable and prevent the kind of unreasonable rate increases that have made health insurance unaffordable for many American families. This is the kind of action that, together with the Affordable Care Act, is shifting power back to consumers,” said Sebelius.
New provisions in the Affordable Care Act will oversee insurance premiums and rate hikes. These include the Medical Loss Ratio that will requiring insurers in the individual and small group markets to spend at least 80 percent of premium dollars on health care and insurers in the large group market to spend at least 85 percent of the premium dollar on health care; rate review; and grant funds to strengthen these reviews.
Sebelius believes “these grants will help put affordable coverage back within the reach for Americans who have been hit hard by skyrocketing costs.”