PA to audit execessive insurance rate hikes on small business

Pennsylvania is taking a more aggressive role in the price its residents will pay for their health care coverage. Governor Tom Corbett will be signing a bill that gives state regulators the authority to deny rate increases on health insurance for small business policies if they are deemed to be excessive.

The bill was the result of work from the statehouse to empower the state Insurance Commissioner to review rate increases for small business and ensure that policies are being priced fairly. The bill is targeted to small businesses with 50 or fewer employees and builds on authority granted to insurance commissioners outlined in the federal health care reform law.

The Pennsylvania Insurance Commissioner has been reviewing rate increases in-state and in seven states nearby which do not monitor rate increases to ensure the overall fairness of the market.

The bill follows on moves from the state Insurance Commissioner who launched an investigation last year into excessive rate hikes. Investigations are still ongoing into two insurers in the state which are proposing rate increases of over 10%. Other states are also undertaking similar measures. Virginia also provides multi-state rate reviews and New York recently ordered insurers to refund millions of dollars in overcharges.

The Insurance Commissioner will also review all rate increases proposed on individuals. A story in the Pittsburg Tribune notes that some in the state think that the bill didn’t go far enough in addressing rate increases. Some advocates argue that all types of increases should be assessed- not just those over ten percent. The bill also leaves out rate hikes in large employer plans.


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