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Release date 11/21/2011
Consumers Union, the policy and advocacy division of Consumer Reports, today applauded a determination by federal regulators that a 12% rate hike on Pennsylvania small businesses is unreasonable. The Department of Health and Human Services decision shows the benefits of new consumer protections against excessive health insurance rates enacted as part of the Affordable Care Act.
“This is exactly the kind of scrutiny that is needed to ensure that rate hikes are fair and justified,” said Sondra Roberto, staff attorney for Consumers Union. “The Affordable Care Act is finally making sure that health insurers are using reasonable assumptions and providing value to their customers when they set rates.”
The Department of Health and Human Services found that the 12 percent rate increase from Everence Insurance for small businesses in Pennsylvania was excessive. The Department said that independent experts determined the choice of assumptions the company based its rate increase on reflected national data rather than reliable and available state data.
The Department has urged the company to rescind the increases and pay a refund to any customers who have already paid the new rate. If the company refuses, it will have to publicly post a justification for proceeding with the increase on its website.
The ACA provided new protections for consumers by requiring all rate hikes of 10% or more to be reviewed by state or federal regulators. States that are found to have an effective rate review program are responsible for the review. Federal regulators review increases in states that do not have effective review for certain markets. Pennsylvania does not have an effective review program for its small group market, therefore, HHS conducted the review.
Contact:
Kara Kelber, Consumers Union, 202.462.6262 or kkelber@consumer.org
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2011 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.
Consumer Reports is a nonprofit membership organization that works side by side with consumers to create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product testing and ratings, rigorous research, hard-hitting investigative journalism, public education, and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or other commercial influences, CR has exposed landmark public health and safety issues and strives to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto safety standards, to winning food and water protections, to enhancing healthcare quality, to fighting back against predatory lenders in the financial markets, Consumer Reports has always been on the front lines, raising the voices of consumers.
© 2011 Consumer Reports. The material above is intended for legitimate news entities only; it may not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent, nonprofit organization whose mission is to work side by side with consumers to create a fairer, safer, and healthier world. We accept no advertising and pay for all the products we test. We are not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports® magazine, ConsumerReports.org® and our other publications and information products, services, fees, and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use of our readers. Neither the Ratings nor the reports may be used in advertising or for any other commercial purpose without our prior written permission. Consumer Reports will take all steps open to it to prevent unauthorized commercial use of its content and trademarks.