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Health insurance for insomniacs

By Jay MacDonald ·
Friday, April 5, 2013
Posted: 6 am ET

For years, the process by which health insurance companies obtain approval for rate increases from state insurance regulators has been shrouded in mystery, largely because the public at large has not been invited to this crowded marketplace.

The Affordable Care Act's rate-review program, however, not only threw open the doors to this marketplace for the first time to reveal the high-brow haggling within, but also requires regulators to review any proposed rate increase that exceeds 10 percent. If a state's insurance laws don't allow its regulators to review rate increases, the feds are happy to do so.

To enjoy the outcome of these arm-wrestling sessions, log on to, then search for the page on "rate review." Once you're there, click on the link for the "Rate Review tool," which takes you to the page titled, "Your Insurance Company & Costs of Coverage."

You can then search by state and/or specific health plan to see how your insurer's rate-increase request is faring in the newly transparent now. You'll also discover your plan's history of rate-increase requests going back three years, plus the actual increase, if any, that your insurer was granted by your state.

At this juncture, I would normally make some wisecrack about how this is health care reform's clever cure for insomnia. But not this time. In fact, these condensed mini-episodes of "What's My Rate?" become sort of addictive, like salted, shelled pistachios. You should try one.

Here's a teaser: The state of California lists 220 health plans with proposed rate increases from 10.87 percent to 30.68 percent (and remember, these are only the double-digit increases being sought). When you find a rate hike proposed by your plan, you'll find out how many people would be affected, how much your monthly premium would jump, how your insurer would allocate the additional money and the company's general rationale for wanting more dough from you.

It won't spoil your reading to know that most insurers blame the lion's share (70 percent to 85 percent) of their need for rate increases on the rising cost of medical care. Hence, they intend to spend a similar percentage of your extra premium dollars toward those higher medical bills.

But what becomes must-see Web TV is when you start to compare your insurer's rate-request history (and what they actually got), the money they allocate (or want) for administrative overhead and their general rationale, if any (it's near the bottom of each listing), with those of other providers. Some of this information also is expected to be available online to aid comparison-shopping when the state health exchanges open for business this fall.

I won't spoil the plot by telling you who the bad guys are. That's half the fun; the other half is the money you'll save when you crack the case.

The rate-review website may not cure your insomnia, but you'll sleep better one day for having used those sleepless hours to save money on your health insurance.

Follow me on Twitter: @omnisaurus.

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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.

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