Ga. firms will have to explain insurance hikes

ATLANTA — Georgia insurance firms will soon have to provide more detailed justifications to consumers if they plan to hike premiums by 10 percent or more.


Georgia Insurance Commissioner Ralph Hudgens has warned insurance companies of the change, which will take effect next month as part of the national health care overhaul.

The requirement applies to individual and small group plans. It will force Georgia insurers to fully explain why they are charging more if they raise premiums significantly, The Atlanta Journal-Constitution reported.

"What this regulation does is allow consumers to have more information about what is going on with their own premiums," said Georgia State University professor William Custer.

Insurers in the state have frequently increased premiums by more than 10 percent in recent years for consumers who buy their own insurance in the individual market, state records show.

But the insurance companies say those increases are necessary to keep pace with the rising cost of medical care.

"Most people only see the premiums that they pay, and they don't understand that those premiums are reflecting dramatic increases in the prices being charged for medical services," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a Washington-based trade organization.

A new rate review process will examine whether higher medical costs are driving the increases in premiums.

Some critics say the review process won't stop rate hikes because it doesn't do enough to rein in the rising cost of medical care. The new requirements, they say, will simply force insurers to charge more to cover the costs of enhanced benefits.

"Enhanced benefits are always going to mean higher premiums," said Graham Thompson, a lobbyist for most of Georgia's large insurers.


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