Alabama health insurance rates continue to be one of ten states that do not have authority or the resources to regulate health insurance rates effectively.  Because of this, larger health insurance rate increases will be subject to federal review starting September 1st.  The article “Health Insurance Premiums in Alabama to Come Under Federal Review” by Stan Diel for The Birmingham News gives some of the details.

The Centers for Medicare and Medicaid Services will start taking a closer look at health insurance rates that have increased more than 10% for individual and small group health insurance plans throughout Alabama.  The federal government won’t be able to block such increases, but they can require health insurance companies to put an explanation online as to why the rates are increased, and they need to be easy to understand.  The Affordable Care Act put this new oversight into place with the intention of keeping rate hikes at a minimum.  This applies to ten out of the 50 states and the other 40 states will be conducting their own reviews.

Many see this oversight as necessary to keep costs down.  It applies to individual policies and small group plans or plans that cover between 2 and 50 people.  This legislation does not apply to larger plans who typically have more bargaining power.  The nonprofit group that publishes Consumer Report, Consumers Union, made a statement this week saying that the Affordable Care Act and these reviews are steps in the right direction towards doing the right thing for American consumers.  There has to be a balance between the cost of health care and what insurers are charging their customers.  Too many people already cannot afford quality health care, and rate increases are only hurting efforts overall, especially for health insurance in Alabama.