To protect consumers, the Affordable Care Act requires states to review insurance rate hikes above 10 percent and, if deemed unreasonable, compel the companies to justify them. Since the provision took effect last September, insurers have made 9 requests, NPR reports, and nearly a year later Texas hasn't reviewed a single one, even though it accepted a $1 million federal grant for rate review. Meanwhile, state insurers are freely raising their rates, including one company that jacked rates by about 20 percent.
The law gives states the first pass at rate review. But if they are deemed by the administration not to have "an effective and timely" process, the federal government takes over. At this point, Texas is goading the Obama administration to move in that direction.
"Under the circumstances it seems like HHS needs to reevaluate whether Texas meets these criteria," said Tim Jost, a professor of health law at Washington and Lee University.
As the government's Affordable Care Act website explains, "If your state doesn't have a Rate Review program, or has a Rate Review program that is ineffective, the federal government will conduct Rate Reviews in your state."
A Texas insurance department spokesman dodged NPR's questions about rate review, and a Perry spokesperson did not return TPM's request for comment Tuesday morning.
Perry may just be biding his time. But if he continues to drag his feet, it's unlikely the federal government will have any choice but to take over Texas' rate review process.
None of this is new for Perry. In a letter to the Obama administration earlier this month, the Republican governor vowed with bravado that Texas will not adopt the law's Medicaid expansion (which the Supreme Court made optional), joining other GOP governors, or implement its insurance exchanges. The latter move cedes to the federal government the power to set up and run Texas' marketplace for health plans.