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Insurance Companies Held to a New Standard on Health Insurance Premiums? Not Really. Car Accident Victims Likely to Suffer from Government Inaction

Georgia’s Insurance Commissioner Ralph Hudgens is going to set insurance companies straight- well, he can try, but likely will not succeed.The piece from the national healthcare reform puzzle which requires insurance companies to justify rate increases will become effective on September 1, 2011.If this change helped to hold down rates, then persons injured in car accidents could better afford the premiums while they are out of work trying to recover. Unfortunately, if you are injured in an auto accident, you are likely to see your health insurance premiums continue to rise. This could be resolved once the new healthcare law’s mandatory provisions take effect. However, as Georgia personal injury attorneys have warned, if the healthcare law is declared unconstitutional thereby eliminating universal coverage, the problem with personal injury victims getting the treatment they need while unable to work will continue indefinitely.

The rate justification requirement forces insurers to publically post any rate increases over 10% and explain why the increase is reasonable.This 10% rule only applies to policies covering individuals and small businesses.All new double-digit rate filings will be submitted with much more documentation now. It is then left to the state to decide if the increase is reasonable based on health care costs and other factors.

We are relying on this new rate review process to save us from the big, bad insurance company, right?Unfortunately, Georgia law ties the hands of the insurance commissioner’s office by giving him no authority to reject rates submitted by the insurers.The insurance commissioner’s office “enforces and regulates laws enacted by the state legislature under Title 33 of the Official Code of Georgia.”In other words, Georgians will have to rely on unreasonable rate hikes to be handled by the federal government.

In my opinion, this is the best part:If the increase is found reasonable, the information will be posted for public review. In a perfect world, the state would allow the insurance commissioner’s office use the discretion of its highly educated employees filled with integrity and honesty to throw out excessive rate hike applications.But in the real world, perhaps the very idea of having the consumer scrutinize the rate increases will cause insurers to think twice before trying to bilk the people who pay the premiums. However, I doubt it. Insurance carriers have been raising rates for years and anyone with a policy knows it. Regular publicity and complaints have not done anything to slow the rate increases.

This article from the AJC reports that “Georgia insurers have frequently bumped up premiums by more than 10 percent in recent years for consumers who buy their own insurance in the individual market. Blue Cross Blue Shield of Georgia, the state’s largest insurer, has hit thousands of its customers with hikes of 20 percent or more in recent years, according to state records.”The numbers are stunning. I have personally witnessed large increases as a Blue Cross/Blue Shield policy holder.

Georgia is making an effort to take advantage of the leverage given by the national health care plan.Despite former Commissioner Oxendine’s decision not to apply for a federal grant last year to help with rate review process, “Georgia will also seek federal funds available for beefing up its rate-review staffing levels…” reports The Affordable Care Act made $250 million available to states to review rate hikes.

If you want to see how the national health care reform has rolled out since March 2010, click here for a timeline.

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