Several states have saved consumers millions in health insurance premiums by keeping a firm hand on rate hikes and spotlighting carriers’ proposed prices.
Those hoping for similar results in Texas, however, may be out of luck.
Texans have no opportunity to compare which health insurance companies propose the biggest increases each year before new prices take effect. Nor do customers have access to all the explanations given to state regulators to justify such changes.
“There is no standard in Texas for releasing this information to consumers and to advocates who want to make sure consumers are getting the best deal on their health insurance policies,” said Blake Hutson, a senior associate for healthcare reform at Consumers Union’s Southwest office in Austin. “We’re the worst of the worst when it comes to protecting consumers from unjustified rate increases in health insurance.”
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The Affordable Care Act set out to bring more scrutiny and transparency to rate reviews nationwide, requiring that experts review premiums going up 10 percent or more for individual and small group health plans. Since that mandate took effect in 2011, the pace of surging premiums has slowed, according to the Health and Human Services Department.
Regulatory powers and public disclosure still vary widely from state to state, however. For instance, the Texas Insurance Department does not put proposed increases for health plans on its website, though some other states do.
Nor do the Centers for Medicare and Medicaid Services, which leave it up to states whether to disclose such information in a public forum, a federal official said on background.
The state Insurance Department has limited powers when it comes to regulating health plan prices for individuals and small groups, experts say. The agency cannot explicitly approve or disapprove such rates because the state Legislature has not granted it statutory authority to do so.
Nevertheless, the department reviews proposed prices for all individual and family health plans sold in Texas to make sure they are adequate, just, fair and nondiscriminatory.
That involves determining whether prices are “actuarially sound” – evaluating whether a carrier’s assumptions and methodology are based on credible data, said Jan Graeber, chief actuary in the agency’s life health division.
If an insurance company’s explanations fall short, the state might request additional documents or the carrier could adjust its projections. It’s unclear what power, if any, the agency has to force resolution in such cases.
Most of this work happens away from the public eye. Texas consumers usually have no idea whether their health premiums will increase or how much until they are notified by their carrier, experts say.
“I don’t know how a [Texas] consumer right now would get information on what [the] rate increases are until they get a letter from the insurer, saying, ‘Here’s how much your rates are going up,’ ” said Stacey Pogue, senior policy analyst at the Center for Public Policy Priorities in Austin.
Trying to plan for such uncertainty can be challenging for consumers and businesses alike, said Janna Hamstra, a San Antonio broker who provides benefits advisory services to employers. Her clients whose group health plans have come up for renewal this year have encountered everything from no change to increases as high as 42 percent.
“If you’re trying to budget for an expense item that’s as profound as health insurance is, whether you’re an individual or company, they find themselves pretty frustrated in not being able to plan at all,” Hamstra said.
The state Insurance Department will not disclose proposed increases or supporting documents that a health insurance carrier marks “confidential,” a spokesman said. Some insurance companies have argued that such data is proprietary information or a trade secret.
“Insurers have complete discretion of whether they mark things confidential,” Pogue said. “Some, as a matter of practice, mark every single page confidential.”
In contrast, Oregon, Colorado and Maine have more authority to act on health insurance rates and operate easily navigable websites where consumers can look up proposed prices – and past increases – for health plans offered there.
Oregon and Maine insurance officials also hold public hearings on carriers’ rate requests, and Colorado has a 30-day comment period during which consumers can react to proposed prices.
Rate review has paid off for Oregon consumers. The state has slashed at least an estimated $155 million in unjustified costs from proposed health premiums since 2010 , said Jesse Ellis O’Brien, healthcare advocate at the Oregon State Public Interest Research Group, a grassroots consumer advocacy. That includes reductions of more than $69 million for the 2014 coverage period alone, he said.
In the most recent review cycle, more than 4,000 Oregon residents submitted comments, and one carrier that initially proposed a 15.9 percent increase ultimately reduced it to 3.9, O’Brien wrote in an Aug. 1 blog post.
Colorado’s health insurance rate review process saved consumers there more than $119 million from 2008 to 2012, according to Colorado Division of Insurance records. The state knocked more than $17 million off health premiums in 2012 alone.
The high level of public scrutiny in Maine has also had a mitigating effect on carriers’ rate requests, said Joe Ditré, previously the executive director of Maine Consumers for Affordable Health Care and now with Families USA, a nonprofit healthcare advocacy group. The state’s insurance bureau couldn’t provide a specific amount of how much consumers saved through those reductions, however.
Though Texas may be less transparent than some states, consumers may find that carriers’ proposed rates and filings justifying price increases have limited value, said an official with a professional group representing around 100,000 independent health insurance agents and brokers nationwide.
Just because a carrier proposes an across-the-board increase doesn’t necessarily indicate thaT someone’s premium will go up by that amount, said Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters .
“I think it’s almost misleading to say to a consumer, ‘This carrier proposed something and it was in excess of whatever,’ ” Waltman said. “It’s not the final rate. … That doesn’t mean that it’s going to translate to an increase for that consumer specifically.”
Consumers would not be wise to select health plans based only on carriers’ proposed rate filings, Waltman said. Texans can access prices for all health plan options and make more-informed decisions by consulting a licensed health insurance agent or broker, who will evaluate the costs, deductibles, size of the provider network and which doctors and medications are covered, she said.
The Affordable Care Act requires carriers seeking price increases of 10 percent or more to notify customers why such changes are occurring. Insurance companies must also post any rate increases of this magnitude on their websites.
Texas temporarily complied with the federal mandate for increases of 10 percent or more to be reviewed by independent experts. Its Insurance Department even posted requested increases of this size on its website during 2012 and part of 2013. That stopped, however, when a federal grant supporting that scrutiny expired.
The Centers for Medicare and Medicaid Services then took over reviewing increases of 10 percent or more in Texas, one of oly five states nationwide to cede this responsibility to the federal government.
The federal agency posted data online in April about price increases for Texas health plans that took effect earlier this year, but the information is hard to navigate and even more difficult to understand. The agency said it is still determining how to distill and post such data in a consumer-friendly format.