EmailRate Review Grants: Significant State Achievements
The following describes significant achievements by states that have received Affordable Care Act grants to improve their programs that review proposed health insurance rate increases. You can learn more about federal and state rate review programs here.
Arkansas
Over the past year, at the discretion of the Arkansas Insurance Commissioner, Arkansas has been negotiating with those insurance companies requesting rate increases greater than 10 percent on their individual health insurance products. The Commissioner recently negotiated a lower rate affecting approximately 90,000 policyholders.
Additionally, Arkansas published two bulletins (6-2011 and 7-2011) to increase filing requirements for individual rate filings and to obtain prior approval authority in the small group.
Rate review grant funding helped Arkansas meet the applicable criteria and designation as an ‘Effective Rate Review Program’ in all markets.
California
California’s Department of Managed Health Care previously had limited rate review authority. Rate review grants funds were used to develop a rate review process and to enhance current IT systems to begin posting rate information, including findings of an unreasonable rate increase, on the Department’s public website.
The California Department of Insurance hired three additional actuaries to increase the depth and speed of the Department’s actuarial review as well as to broaden the scope of review to include individual and small group rate filings. The Department website was enhanced to improve posting and public access to rate filings.
Since January 1, 2011, the Department of Insurance rate review process, as enhanced by the rate review grant funds, has resulted in some rate reductions and adjustments. It is estimated that reductions negotiated by the California Department of Insurance will save policyholders a total of at least $40 million.
Colorado
After receipt of the rate review grant award, the Colorado Division of Insurance was able to work quickly to hire staff to implement enhanced rate review to ensure rates filed are vigorously reviewed and analyzed.
Grant funds have allowed Colorado to enhance its current rate review IT infrastructure, including the display of a consumer-friendly rate summary and the ability for consumers to request an email notification when a rate increase is submitted.
Illinois
In the past year, the state has utilized the rate review grant funding to establish an effective rate review program. Specifically, the state has developed a process to collect, analyze, and review rates for reasonability; established a web portal to receive rate information from insurers; added additional staff within the Department of Insurance to collect and analyze filings; contracted with a consulting firm to provide actuarial review services; and held meetings, conducted webinars, and developed web tools to engage consumers in efforts to improve premium review in Illinois.
In December 2010 as a result of receiving rate review grant funds, the Department issued a bulletin requiring all carriers to file a schedule of base rates and supporting actuarial documentation. Previously, most carriers did not have to file with the Department. The Department was able to establish their own portal to collect rate data from insurers. Each rate filing must now be submitted with a newly developed standardized form that requires insurers to provide information on premium increases, loss ratios, earned premiums, paid claims, and incurred claims.
Kentucky
Through the use of rate review grant funds, the Kentucky Department of Insurance has hired six full-time employees and created a team dedicated solely to the review of health insurance rates. The Department also created a website for consumers to learn about the rate review process, including an e-mail box for consumer comments and FAQs about the Kentucky rate review process. The Department undertook additional data collection to support enhanced rate review.
Massachusetts
Since receiving grant funds, the Massachusetts Division of Insurance contracted with actuaries to complete studies enabling the state to develop regulations to act upon the Division’s new authority for expanding the filing requirements for small group rates. The studies were used by the Division of Insurance as part of regulatory changes to ‘Small Group Health Insurance,’ which were promulgated on April 1, 2011. The regulation will additionally serve as the blueprint to develop a data collection tool that will facilitate collection of commonly reported information across all small group rate filers. Grant funds allowed the Division to accelerate its research to meet the changing legal environment for small group health insurance rate review.
Maryland
As a result of grant funds, of the 22 rate filings that Maryland’s Insurance Administration approved during the [3rd] quarter, 10 rate increase requests were reduced due to the Insurance Administration’s review.
With funds from the rate review grant, the Maryland Insurance Administration engaged an actuarial firm to provide recommendations on how best to enhance the health insurance premium rate review process in Maryland and how best to provide information to consumers about the rate review process. Based upon recommendations, and having considered the public comments received, the Insurance Administration will make a number of changes to improve its rate review process such as enhancing the information provided to consumers about the rate review process and the key drivers of premium rate increases. It will also provide opportunities for public comment on proposed rate increases.
Nevada
With rate review grant funding, Nevada has been able to add actuarial support that has brought a new expertise to its rate review analyses. The substantial increase in Nevada’s annual rate review budget, as well as the addition of a health actuary and the utilization of outside actuarial resources, has provided the necessary staffing and expertise to analyze rate filings.
The grant also inspired legislative initiatives to broaden Nevada’s review authority to include small group health plans. Assembly Bill 74 was signed by Governor Sandoval on June 17, 2011 granting the Commissioner authority over rates for small group PPOs. With this bill, the Division now has authority over all health benefit plans for the individual and small group markets.
New Jersey
New Jersey used rate review grant funding to improve its review of health insurance rate increases. Prior to receiving the grant funding, filing of comprehensive medical rates electronically in the individual, small group, and large group markets was optional and not widely observed. As a result of the grant funding, all rate filings are now received electronically, which has helped New Jersey maintain filing information. Additionally, in an effort to standardize filing submissions, for rates filed on or after July 1, 2012, carriers will be required to submit two worksheets and a checklist to ensure all documents are properly submitted and in the correct format. Finally, New Jersey has partnered with the Rutgers Center for State Health Policy to engage stakeholders in a series of forums to understand the impact of rate increases and the type of information consumers desire.
New York
New York used the grant funds to enhance their rate filing requirements by standardizing and streamlining rate applications. The New York Department of Insurance used funds and a newly hired actuary and examiner to expand the information collected across all product types when reviewing rates. The Department also developed a webpage devoted to premium rates that contains general information about prior approval, FAQs, information regarding proposed rate increases, and consumers’ comments on rate increases.
North Carolina
As a result of the grant funds, the North Carolina General Assembly expanded the Commissioner of Insurance’s prior approval authority over health insurance rates in North Carolina to include all small group products, in addition to existing authority over all individual products.
The Department also hired seven new rate review staff, including an actuary and an attorney. The actuary’s primary duties focused on the unreasonable premium regulations and determining how best to adjust the Department’s rate review process, especially given its new authority. The attorney’s activities included how best to restructure and standardize statutory authority across markets, products and types of insurers, and how to incorporate a hearing process into the current rate review process.
Oregon
Oregon is using its rate review authority and the grant funds to create a more transparent rate review program, focused on educating consumers on the costs of medical care and how premium dollars are spent.
Oregon recently demonstrated its strong rate review regulation when a carrier sought a 22 percent increase in the individual market and Oregon only approved a 12.8 percent increase. It is estimated that approximately 60,000 people would have been impacted by the requested increase. Oregon held its first public hearing on a rate filing in nearly 20 years following the 22 percent rate increase.
South Dakota
On March 28, 2011, Governor Daugaard signed SB 43 into law, requiring prior approval over all individual accident and health premium rates. The new law also requires small group rates to be submitted for review at least 30 days prior to implementation of an increase (effective July 1, 2011). The Division of Insurance has contracted with a qualified actuary to provide comprehensive rate review standards for use by the current staff in referring rates for actuarial review.
Tennessee
On May 30, 2011, Governor Haslam signed into law a bill expanding the Department of Insurance’s scope of review and prior approval authority to small and large group policies. The Department is currently working on regulations to accompany their new approval authority. As of July 1, 2011, all small group and individual health insurance rates must be filed in advance for approval by the Commissioner. Additionally, the Department is exploring ways to incorporate use of Tennessee’s All Payer Claims Database to improve their rate review process.
Utah
On March 30, 2011, Governor Herbert signed HB 128 into law, granting the Utah Insurance Department the responsibility for conducting an actuarial review of rates established for the health benefit plan market. With the assistance of grant resources, Utah is far exceeding their original goal to review at least 50 percent of individual and small group rate filings, by reviewing 100 percent of all submitted rate filings. Prior to the rate review grant, there were no analysts on staff to review rates. The grant has allowed Utah to increase its staffing in order to improve the rate filing review process.
Posted on: September 1, 2011