Can the Government Stop Massive Insurance Rate Hikes?

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"While the proposed rule gives consideration to the impact of rising medical costs, it also establishes a threshold for review that is incomplete because it does not adequately factor in all of the components that determine premiums, including the cost of new benefit mandates and the impact of younger and healthier people dropping coverage," she added.

Obama Administration Unveils New Insurance Rate Review Procedures

The health care law faces challenges from all fronts -- more than 20 states have filed a joint lawsuit questioning the law's constitutionality while incoming House members are vowing to repeal and replace parts of the bill. The effectiveness of the rate review process could have a significant impact on consumers' view of the law.

One of the biggest challenges is the way rate reviews vary widely from state to state. A study this month by the Kaiser Family Foundation found that a state's statutory authority says little about how it actually reviews premium increases.

"We found that having approval authority over rates does not necessarily protect consumers from large rate increases, and that the rigor and thoroughness that states bring to rate review can vary widely, depending on motivation, resources, and staff capacity," the report stated.

Additionally, some states' authority only reaches certain insurance companies while exempting commercial carriers, thus creating an imbalance. Others allow insurers to keep their filing a "trade secret" so consumers are not able to access that information.

Even states that have authority to approve rates, they are constrained by tight timelines or do not have enough staff resources, the study found.

The Obama administration says the new health care law is designed to erase such anomalies, but it is likely to be met with resistance from some states who have rejected the new law altogether.

The public has yet to fully digest the new health care law as well even as more provisions are set to roll out in just two weeks.

Kaiser Family Foundation's latest tracking poll shows the public still divided in its views of the health reform law, a sentiment largely unchanged since the law's enactment in March. Forty-two percent of Americans say they have a generally favorable view of the law, while 41 percent say the opposite.

But opposition from seniors seems to be on the decline. The share of those aged 65 and older holding unfavorable views of health reform dropped to 40 percent in December, the lowest since the law was passed.

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