Texas To Review More Insurance Premiums

The Texas Department of Insurance is about to change its longtime policy of allowing uncontested insurance rate increases of up to 50 percent without interference, officials said.

State regulators will require insurance companies to justify “unreasonable'” premium rate increases under the new federal health care overhaul, The Austin American-Statesman reported . State officials say they have always had that authority but have used it sparingly, the newspaper reported.

“In the past, we’ve looked at rate increases above 50 percent, and we’ve looked at complaints. That’s mainly what we’ve done as a watchdog,” Katrina Daniel, senior associate commissioner of the department’s life, health and licensing program, told the newspaper.

She said Texas lacks the resources, including staff and data, to perform regular rate reviews and comparisons.

However, under the new federal law, insurance companies will be required to justify to federal and state regulators “unreasonable” rate increases before imposing them. Companies also will have to post that information on their websites.

The federal government has yet to define what it regards as “unreasonable,” Daniel points out.

Last week, federal officials distributed $46 million of $250 million in grants to the states. The $1 million that Texas received was expected to go toward developing the data required for the greater number of rate reviews.

“We will be reviewing more rates, for sure,” Daniel said.

Insurance companies have argued all along that rising health care costs have forced their rates to increase.

“With no governor on those costs, the rates will continue to have to go up,” Jennifer Ahrens Cawley, executive director of the Texas Association of Life and Health Insurers, told the newspaper.

Topics Texas