To hear the Secretary of HHS tell it cutting the premium increase requests made by health insurers is only a good thing. The assumption is that anything above a 10% increase is unreasonable.
When regulators cut what they contend are “unreasonable” premium increases they most often lower the future trend rate for health care costs. Predicting what claims will be incurred more than a year in advance is not easy task and one educated guess is as good as another. However, guessing wrong on the low side means higher premium increases in future years. .
Read about the implications of this approach in my article on Health Insurance Illuminated.
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- Health insurance rate hikes in nine states deemed excessive by HHS (nvrdc.wordpress.com)
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