Bob Grissom Chief Examiner Market Regulation Bureau of Insurance

Transcription

1 Bob Grissom Chief Examiner Market Regulation Bureau of Insurance

2 HHS Rate Review Determination for Virginia Individual Market Fully Effective Rate Review Program, with the exception of HMO and Association products Small Group Market Rate Review Program Not Effective

3 Policy forms to be filed with Commission; notice of approval or disapproval; exceptions. A. No policy of life insurance, industrial life insurance, variable life insurance, modified guaranteed life insurance, group life insurance, accident and sickness insurance, or group accident and sickness insurance; no annuity, modified guaranteed annuity, pure endowment, variable annuity, group annuity, group modified guaranteed annuity, or group variable annuity contract; no health services plan, legal services plan, dental or optometric services plan, or health maintenance organization contract; no dental plan organization dental benefit contract; and no fraternal benefit certificate nor any certificate or evidence of coverage issued in connection with such policy, contract, or plan issued or issued for delivery in Virginia shall be delivered or issued for delivery in this Commonwealth unless a copy of the form has been filed with the Commission. In addition to the above requirement, no policy of accident and sickness insurance shall be delivered or issued for delivery in this Commonwealth unless the rate manual showing rates, rules, and classification of risks applicable thereto has been filed with the Commission. (emphasis added)

4 Individual Market Policy forms; powers of Commission. Individual accident and sickness insurance policy forms and the rate manuals showing rules and classification of risks applicable to individual accident and sickness insurance policy forms shall be subject to the provisions of The Commission, subject to , may disapprove or withdraw approval of any such policy form if it finds that the benefits provided in the policy form are or are likely to be unreasonable in relation to the premium charged. If the Commission disapproves a policy form or withdraws approval of a form, an insurer may proceed as indicated in

5 Individual Market 14VAC Purpose. The purposes of this chapter (14VAC et seq.) are to: (i) implement procedures for the filing of rates for individual and certain group accident and sickness insurance policy forms and (ii) establish minimum loss ratios to assure that the benefits provided by such policy forms are or are likely to be reasonable in relation to the premiums charged.

6 Reasonable in Relation to Premiums Charged Premium Received = $1.00 Anticipated Loss Ratio = 60% Claims Paid = $.60

7 Filing Must Include: 1. Description of type of policy, including benefits, renewability, general marketing method, and issue age limits. 2. Description of how rates determined, including general description and source of each assumption used. 3. Estimated average annual premium per policy.

8 Filing Must Include (Cont d): 4. Anticipated loss ratio and a description of how it was calculated. 5. Minimum anticipated loss ratio presumed reasonable. 6. If item 4 is less than item 5, supporting documentation for use of such premiums. 7. Certification by a qualified actuary that, to the best of actuary s knowledge and judgment, rate filing is in compliance with applicable laws and regulations of the Commonwealth and premiums are reasonable in relation to benefits provided.

9 Chapter 130 Reasonableness Standards Future Loss Ratio = 60% Lifetime Loss Ratio = 60%

10 Requirements for Proposed Rate Increase: 1. Description of type of policy, including benefits, renewability, and issue age limits. 2. Scope and reason for rate revision. 3. Comparison of revised premiums with current premium scale. 4. Statement of whether revision applies only to new business, only to in-force business, or both. 5. Estimated average annual premium per policy, before and after proposed rate increase.

11 Requirements for Proposed Rate Increase (cont d): 6.Past experience, as specified in 14VAC C: a. Show Earned Premiums (EP), Incurred Benefits (IB), Increase in Reserves (IR), and Incurred Loss Ratio = (IB + IR) (EP). b. Other available data insurer may wish to provide. Additional data may include, if available and appropriate, ratios of actual claims to claims expected according to assumptions underlying existing rates; substitution of actual claim run-offs for claim reserves and liabilities; accumulations of experience funds; substitution of net level policy reserves for preliminary term policy reserves; adjustments of premiums to an annual mode basis; or other adjustments or schedules suited to the form and to records of the company. All additional data must be reconciled, as appropriate, to the required data.

12 Requirements for Proposed Rate Increase (cont d): 7. Details and dates of all past rate increases on form. 8. Description of how revised rates determined, including general description and source of each assumption used. For expenses, include percent of premium, dollars per policy, and/or dollars per unit of benefit. 9. If rate revision applies to new business, anticipated loss ratio and description of how calculated. 10. If rate revision applies to in-force business: a. Anticipated future loss ratio and description of how calculated. b. Estimated cumulative loss ratio, past and future and a description of how calculated.

13 Requirements for Proposed Rate Increase (cont d): 11. Minimum loss ratio presumed reasonable in 14VAC C. 12. If 9, 10a, or 10b is less than 11, supporting documentation for use of such premiums. 13. Current number of Virginia policyholders and either premiums in force, premiums earned, or premiums collected for such policyholders in year immediately prior to filing of rate increase. 14. Certification by qualified actuary that, to the best of actuary s knowledge and judgment, rate filing is in compliance with applicable laws and regulations of the Commonwealth and premiums are reasonable in relation to benefits provided.

14 Number of Rate Filings Year Filings Received Filings Approved

15 VIRGINIA INDIVIDUAL MARKET SHARE 2010 Company Members Net Earned Premiums Market Share Anthem 232,806 $603,047, % GHMSI 19,811 $68,852, % Golden Rule 14,198 $28,869, % Aetna Life 13,821 $21,676, % Kaiser 10,116 $36,221, % Time 7,239 $16,446, % MEGA 3,300 $8,360, % Humana 2,580 $4,027, % Optima 2,407 $5,140, % CareFirst 1,698 $3,288, % UnitedHealthcare 618 $2,188, % HealthKeepers 321 $2,243, % Optimum Choice 284 $1,755, % Others 211 $1,272, % Total 309,410 $803,391, %

16 Consumer Input 800 call-in number

17 Premium Rate Review Projects Targeted Rate Review Projects (Rate Review Project)

18 Premium Rate Review Projects Rate Submission Requirements and Review Procedures Manual (Requirements & Manual Project)

19 Premium Rate Review Projects Premium Trend Analysis Project

20 Premium Rate Review Projects Website Enhancements & Actuarial Expertise

21 Small Group Market HMO Product HHS determined that Virginia does not have an effective rate review program.

22 Policy forms to be filed with Commission; notice of approval or disapproval; exceptions. A. No policy of life insurance, industrial life insurance, variable life insurance, modified guaranteed life insurance, group life insurance, accident and sickness insurance, or group accident and sickness insurance; no annuity, modified guaranteed annuity, pure endowment, variable annuity, group annuity, group modified guaranteed annuity, or group variable annuity contract; no health services plan, legal services plan, dental or optometric services plan, or health maintenance organization contract; no dental plan organization dental benefit contract; and no fraternal benefit certificate nor any certificate or evidence of coverage issued in connection with such policy, contract, or plan issued or issued for delivery in Virginia shall be delivered or issued for delivery in this Commonwealth unless a copy of the form has been filed with the Commission. In addition to the above requirement, no policy of accident and sickness insurance shall be delivered or issued for delivery in this Commonwealth unless the rate manual showing rates, rules, and classification of risks applicable thereto has been filed with the Commission. (emphasis added)

23 HMO Products B Evidence of coverage and charges for health care services. 1. No schedule of charges or amendment to the schedule of charges for enrollee coverage for health care services may be used in conjunction with any health care plan until a copy of the schedule, or its amendment, has been filed with the Commission. Any schedule of charges or amendment to the schedule of charges for enrollees in the plans administered by the Department of Medical Assistance Services that provide benefits pursuant to Title XIX or Title XXI of the Social Security Act, as amended, is excluded from the provisions of this subsection. 2. The charges may be established for various categories of enrollees based upon sound actuarial principles, provided that charges applying to an enrollee in a group health plan shall not be individually determined based on the status of his health. A certification on the appropriateness of the charges, based upon reasonable assumptions, may be required by the Commission to be filed along with adequate supporting information. This certification shall be prepared by a qualified actuary or other qualified professional approved by the Commission.

24 VIRGINIA SMALL GROUP MARKET SHARE 2010 Company Members Net Earned Premiums Market Share Anthem 165,802 $678,871, % HealthKeepers 86,000 $311,527, % Optima Health Plan 54,416 $189,431, % GHMSI 42,475 $186,281, % CareFirst 32,639 $123,180, % UnitedHealthcare 25,967 $101,691, % Optima 19,601 $71,286, % UnitedHealthcare Mid-Atl. 18,503 $73,913, % Kaiser 14,214 $46,334, % Coventry 13,830 $45,556, % Southern Health 12,497 $43,005, % Aetna Life 12,430 $36,993, % Aetna Health 10,933 $39,607, % Optimum Choice 6,069 $27,557, % Guardian 3,720 $24,637, % Piedmont 2,785 $9,992, % MAMSI 621 $3,849, % Time 333 $1,377, % Others 261 $5,569, % Total 523,096 $1,975,239, %

25 Where does Virginia go from here?