A 2010 law requires insurers to seek the prior approval of the New York Department of Financial Services to raise certain health insurance rates and to support the rate increase requests with “substantial” and detailed information. Since the law has been implemented, insurers have sought increases of 12.7 percent on average. The State has allowed increases of 8.2 percent. In September, the Superintendent of the Department of Financial Services announced that the insurers’ filings would be posted online. At least a dozen insurers issued formal objections to the public disclosure.
On October 19, 2011, the Department of Financial Services rejected the insurers’ objections. While an additional appeal is available, most insurers have agreed to make their rate filing submissions public. The State’s largest insurer, UnitedHealth Group announced last week that it had formally withdrawn its objections to the public filing of its rate information. At least seven other insurers, Aetna Health, Emblem Health, Empire HealthChoice, Excellus Health, HealthNow, Capital District Physicians Health Plan and Connecticut General Life Insurance Co., have followed suit. Those insurers represent 90 percent of the health insurers whose rate increases are subject to Department of Financial Serivces approval. Several other insurers have not withdrawn their objections.
Certain details of the specific contracts will be considered for exclusion because other providers can use that information to demand higher payments and such information is of little value to consumers.
According to the Department of Financial Services, the rate applications contain all of the information needed to justify a premium increase, including:
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A summary of the amount of money the insurer spent in the last two years on medical claims, which is used to project future claims expenses. “Commonly referred to as ‘medical trend,’ this information is the basis of the premiums paid by policyholders
- The actuarial memorandum, which specifies all of the actuarial assumptions used in analyzing how much medical claims are going to be in the coming year.
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The amount of administrative expenses and profits.
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A list of all benefit changes, such as copayments or drug benefits, which have been made to the policy.
Which policies are affected by the rate increases, which geographic regions will be getting increases and the number of policyholders affected.
A copy of the press release can be located here
Sarah Delaney and Sharon Angelino