If you are wondering who regulates the health insurance rates in America, the answer may surprise you.
First, it all depends on whether you are buying for yourself, or your employer is providing this option for you and also what state you live in.
We will break this down into state rate regulations and federal rate regulations.
States do have a hand in making sure the claims filed by the people enrolled can be paid for, but the state puts more emphasis on plans charged to small employers (less than 50 workers) and to people who buy their health coverage individually.
There is a reason for this: In most cases, a large employer (more than 50 employees) will be able to negotiate better rates for their employees, since there is a more varied range of health and unhealthy individuals.
So, the government pretty much feels like the large companies can fight for themselves.
Now for the smaller companies employing forty-nine people and less, and individuals who buy it on their own, they need more protecting.
They have less leverage to bargain with.
If an individual or smaller company has more expensive healthcare costs, the insurer's desire to sell to this group has decreased.
As a result, the insurer may quote health insurance rates at unreasonable prices.
For this reason, most states have rate restrictions on premiums for this demographic, just so this doesn't happen.
As far as federal regulation goes, there is no direct law or regulation that controls how much a company pays for its premium.
But there are federal laws that protect individuals from being discriminated against, concerning their health conditions.
The Health Insurance Portability and Accountability Act (HIPAA) ensures that employees and their dependents in similar situations with people (for instance, same job title, full time/part time, tenure at the company) in that same group cannot have different health insurance rates.
Meaning you cannot be charged exorbitant rates as opposed to the person sitting in the office next to you -no matter what your health status is.
Another regulation is the Employee Retirement Income Security Act.
This law is simple: it states that employers must act in the best interest of the participants and their dependents and must provide benefits responsibly.
This also regulates protects health insurance rates because it prevents companies, large and small from acting selfishly by keeping its employees needs in mind.
In closing, rest assured that there are state and federal regulations in place that protect you from being singled out - whether you are buying health insurance yourself or your employer is responsible for it, you are protected.