The rate review regulation requires independent experts to examine 12 factors to determine whether an increase of more than 10 percent is "reasonable":
• Changes in medical cost trend changes;
• Changes in utilization of services;
• Cost-sharing changes;
• Changes in benefits;
• Changes in enrollee risk profile;
• Impact on rates of over- or under-estimate of medical trends in previous years;
• Reserve needs;
• Administrative costs related to programs that improve healthcare quality;
• Other administrative costs;
• Applicable taxes and licensing or regulatory fees;
• Medical loss ratio; and
• The health plan's risk-based capital status relative to national standards.
The law doesn't give federal regulators the power to reject rate increases deemed unreasonable. However, health plans will be required to publicly justify and post on their websites any "unreasonable" rate increase.
"These steps allow consumers to know why they are paying higher rates," according to CCIIO.