Conclusion

States can play a very important role when it comes to limiting health insurance premiums. By establishing rules that govern such premiums, they limit insurers’ ability to charge one group or individual premiums that are exorbitantly high compared to the premiums they charge to other groups or individuals.

To help control the overall price of insurance, states can require that the majority of premium dollars be used for medical care, regularly examine insurers’ premiums, and make sure that all insurers enroll a fair mix of healthy and less healthy individuals. States also can make it easier for consumers to compare prices by requiring insurers to offer a standard package of benefits. Besides requiring that all insurers have adequate reserves to pay claims, states can require that nonprofit insurers limit their surpluses and spend any excess revenue on community health care needs.

Consumers and consumer advocates can contact their state insurance departments to learn about what their state does to control health insurance premiums and how the state examines those premiums. They may be able to participate in hearings about an insurer’s proposed premiums or about a nonprofit insurer’s surplus. When needed, they can advocate for stronger rating laws and for premium assistance programs or other public subsidies to make insurance affordable to people with low incomes or those with high health care needs.