HEALTH INSURANCE RATE REVIEW: ARE YOU READY FOR THIS? May 18, 2016

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Aileen Chandler
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1 1 HEALTH INSURANCE RATE REVIEW: ARE YOU READY FOR THIS? May 18, 2016

2 CONSUMERS UNION RATE REVIEW WEBINAR Timothy Stoltzfus Jost Professor Emeritus, Washington and Lee University Law School 2

3 RATE REVIEW TIMELINE Insurers participating in the marketplaces must have submitted their plan information to CMS by May 11. Rate information included will not be published. Insurers in states with rates subject to federal review (Missouri, Oklahoma, Texas, and Wyoming) must also have submitted their rates to CMS. These rates should be available May 25. Insurers in other states will submit their proposed rates to the states. The states must submit these rates to CMS by July 15 and make the rate review submissions public by August 1. Final rates must be available by November 1. 3

4 FACTORS INSURERS MAY CONSIDER 3Rs and provider fee moratorium (Edwin has covered) Medical trend (especially pharmaceutical) Assumptions about the risk pool Repeal of the expansion of small group market Changes in provider networks Insurer market competition Provider market competition and reimbursement structures Insurer innovation 4

5 HOUSE V. BURWELL House of Representatives case challenging reimbursement to insurers for cost-sharing reductions District court ruled against administration on Thursday, May 12 Does not affect the legal obligation of insurers to reduce cost sharing for those eligible, only their reimbursement for reductions If courts ultimately rule against administration could affect premiums, insurer participation, possibly affordability BUT SHOULD NOT FOR 2017! 5

6 HOUSE V. BURWELL The decision has been stayed by the district court The appeal will likely not be heard until the fall. May not be decided until 2017 If adverse appellate panel decision, government would request en banc review with full D.C. Circuit, then certiorari to Supreme Court May not have a final decision before 2018 Insurers should not take decision into account in setting 2017 rates. 6

7 Consumers Union Rate Review Webinar Edwin Park May 18,

8 IMPACT OF THE 3RS End of temporary reinsurance program. End of temporary risk corridors program. Permanent risk adjustment. 8

9 MORATORIUM ON HEALTH INSURER TAX No health insurer tax in 2017 under last year s budget deal. 9

10 ACTUARIAL ASSUMPTIONS What does it really mean when insurers claim that enrollees are sicker than expected? 10

11 11 CONSUMER ADVOCATE ACTION ITEMS Dena Mendelsohn Staff Attorney, Consumers Union

12 12 HHS IMPROVED TRANSPARENCY BUT THERE IS STILL ROOM FOR IMPROVEMENT 2014: HHS did not make filings publicly available in a timely manner. 2015: HHS posted filings with 10% or larger increases. Many of the posted filings were redacted. 2016: HHS will post all rate filings (including decreases) but later than last year. Will continue to offer trade secret exemption.

13 13 TRADE SECRET EXEMPTION HHS interprets the Freedom of Information Act (45 CFR 5.65) as extending trade secret exemption for parts of rate filings. Consumers Union believe this application is unwarranted. Insurers solely participating in the federal exchange may redact contents of Parts I and III of their filings under this protection. Historically, plans have liberally applied redactions. CA and NY are among states that do not offer this exception and their insurance markets are strong.

14 14 A MORE COMPLETE PICTURE We will have a more complete picture of rate proposals this year than ever before, but possibly after rate review is over in some states. So far, we see (for example): Maine: plans filed rate increases starting at 14%. Oregon: many double-digit proposed rate increases. Vermont: two marketplace plans filed 8.2% and 8.9% rate increases. California: anticipates 8% rate increases (still waiting on negotiations with Covered California).

15 15 DOES YOUR EFFECTIVE RATE REVIEW STATE EFFECTIVELY REVIEW RATES? According to HHS, all but 4 states (perhaps soon to be 3 states) have Effective Rate Review programs. But does your state effectively review rates? Right now, Effective rate review does not mean that the state or the Federal government will probe deeply on rates or has the capacity to block an unreasonable rate increase. Is your regulator transparent about its process? Does your state have prior approval but fall back on the deemer clause?

16 16 HOW CONSUMERS & THE PRESS CAN PARTICIPATE IN THE RATE REVIEW Depending on the state: Demand the full filing, without redactions. Question data and predictions in the Actuarial Memorandum. Ask for description/explanation of non-public information. Ask the attorney general or insurance regulator to intervene. Make sure regulators in prior approval states review filings before the deemer date. Petition for, and participate in, public hearings.

17 17 HOW CONSUMERS & THE PRESS CAN PARTICIPATE IN THE RATE REVIEW Demand more information: Is your regulator considering affordability? Will your regulator review provider contracts? How do the plans intend to improve quality, contain costs?

18 18 THANK YOU! Resources at: consumersunion.org/topic/health-care/rate-review Contact Dena Mendelsohn:

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