Advocates Applaud Arizona’s Commitment to Provide Transparency and Public Input on Health Insurance Rate Increases

Arizona PIRG Education Fund

With the Governor’s Regulatory Review Council vote to approve the Arizona Department of Insurance’s proposed rule on health insurance rate increases, the Arizona PIRG Education Fund and Children’s Action Alliance said Arizona decision-makers seized an opportunity to show Arizonans an ongoing commitment to a successful health insurance rate review program by incorporating transparency and public input into their rule.

Under the Patient Protection and Affordable Care Act, any proposed premium health insurance rate increase of 10 percent or greater needs to be reviewed. Under the law, insurers must file information with the federal government and make that information public, and either the state or the federal government must determine whether the increases are reasonable or unreasonable. Arizona has been seeking to join over 40 States and be granted status as a State with an Effective Rate Review Program. In order for the federal government to approve the rate review rule, ADOI must ensure transparency and opportunities for public input, among other provisions.

While the groups agreed in theory that Arizonans could benefit from Arizona having an Effective Rate Review Program; they expressed concern that ADOI’s proposed rule was vague, may not establish a health insurance rate review program beneficial for Arizona consumers or gain the necessary approval from the federal government.

“We are pleased that GRRC members recognized the value of public input and incorporated this into the rule,” said Dana Wolfe Naimark, President and CEO of Children’s Action Alliance.  “Effectively reviewing the rate increases of health insurers saves consumers money.  A calculation error by an insurer in California two years ago was discovered and resulted in a 39% rate increase being reduced by two-thirds.”  Naimark added “today’s vote is a good first step toward a process where Arizonans can review why their health insurance rates have increased and make informed choices about buying health insurance.”

According to the Arizona PIRG Education Fund, although Arizona ultimately needs to prevent unreasonable health insurance rate increases from going into effect, rate review offers a way for Arizona to oversee insurers’ premium increases and provide better consumer protections.

Diane E. Brown, Executive Director of the Arizona PIRG Education Fund stated that through GRRC’s 4-0 decision today to insert language to ADOI’s proposal, future ADOI staff, GRRC council members, insurers, consumer advocates and interested others would have clarity in the rule. Brown added, “Transparency and meaningful opportunities for public input on health insurance rate increases can and has saved consumers millions of dollars. We are pleased that ADOI has and will advance opportunities for Arizonans to reap these benefits.”