2018 MIDTERM ELECTION

Time: D H M S

Laugh of the Day: Tufts & UHC claim that rate hike transparency would "harm consumers" and "cause confusion"

Regular site visitors know that I spent several months last fall poring over various insurance carrier rate filings in order to patch together, as best as I could, a rough idea of the weighted average premium rate increases for each state (and nationally) based on the average rate hikes by individual carriers, weighted by their market share by effectuated enrollees.

This project was helped to some degree by the introduction of the HealthCare.Gov Rate Review Database, where you can easily search for different carriers by state/other criteria and find out what their average rate hikes (proposed and, later on, approved) will be for 2016.

Unfortunately, as I noted last June, there's a catch: The Rate Review site only included requested rate hikes greater than 10%. This was a serious problem for a couple of reasons:

  • First, not listing hikes lower than 10% (not to mention rate decreases, which are happening in a few cases) led to warped, exaggerated, misleading headlines making it sound as though every carrier in every state was jacking up prices by double digits.
  • Secondly, of course, not listing the hikes lower than 10% made it that much more difficult for me to track down the remaining rate changes (some of which I never was able to do).

In any event, I did the best I could, and ended up estimating roughly 12-13% overall weighted average rate hikes nationally...which, as it happens, turns out to have been pretty much dead on target.

Even so, it would have been a hell of a lot easier if the Rate Review site had included every rate change request from every carrier in every state. The enrollment market share might still be missing for many carriers, but having all of the rate changes (whether >10%, <10% or <0%) would have still helped tremendously. (NOTE: The Rate Review site includes all of the changes now, but the <10% entries weren't filled in until after OE3 actually started).

I was, therefore, very happy indeed when I read that for 2017, CMS is proposing to post all proposed rate hikes publicly on the site from the get-go, not just those over 10% (although there's still some confusion as to whether this would include rate decreases as well, or jus those over 0%, which would still be better than what we had this year).

I was so interested in this that I actually submitted a public comment encouraging it, along with a few other nice touches:

For the 2016 Rate Review process, only rate increase requests higher than 10% were posted publicly by CMS at RateReview.Healthcare.Gov prior to final approval.

It's my understanding that for the 2017 Rate Review process, while you're proposing that insurance carriers *submit* ALL rate change requests (both increases and decreases), you're proposing to only publicly post INCREASES on the rate review website.

While this is still a huge improvement over 2016 (ie, posting ALL increases instead of only the ones over 10%), it still would mean that rate DECREASES or FLAT rate requests still wouldn't be posted.

I'd strongly request/recommend posting ALL rate change requests publicly, regardless of whether they're over 10%, under 10% or even under 0%.

In addition, it would be greatly appreciated if you could publicly post the number of COVERED/AFFECTED LIVES from the rate request filings. I realize that this number is already included in some filings, isn't included in others and is protected as a trade secret in some cases, but it would be ideal if you could post that number *when available* in a consistent, easy-to-view field the way you do for "Requested Rate Change", "Includes Exchange Plans", "Final Determination" and so on.

Finally, speaking of the "Includes Exchange Plans" field, it would be ideal if, instead of a simple "Yes/No", it specified whether the filing was "ON Exchange Only", "OFF Exchange Only" or "BOTH ON and OFF Exchange".

So far, so good.

However, it appears that at least two major insurance carriers aren't so happy about this proposed improvement in transparency...with the most laughable of excuses for hiding their rate hikes:

Industry groups also criticized the government's suggestion of making all proposed premium rate increases, not just final rate increases of 10% or more, available to the public. Unveiling all proposed and final rate increases would be a big victory for those advocating for more transparency in healthcare, but most insurers cried foul.

“While we fully support increased transparency, we believe that making all rate increases public, including those not subject to rate review, would result in unnecessary consumer confusion,” wrote Kristin Lewis, vice president of government affairs and public policy at Tufts Health Plan, an insurer based in Watertown, Mass.

“The availability of this competitive information may encourage irrational pricing, which can harm consumers and creates market instability,” added UnitedHealthcare's Johnson.

Ah, yes. Because having an idea of how much you're gonna have to pay for your health insurance ahead of time is simply awful.

Look, I realize that the proposed rates are often changed before open enrollment starts, and yes, people still have plenty of time to actually check out the rates before committing to enrolling during Open Enrollment itself, but health insurance has never been the same animal as standard retail businesses. The health insurance industry has never been particularly accountable to anyone in the past, and has been guilty of plenty enough bad behavior to warrent being strictly regulated in the future. The ACA is essentially holding an economic gun to the head of millions of Americans and requiring them to purchase products from private, profit-based corporations; the flip side of that is that the carriers are subjected to increased regulation and transparency; this is simply one more of those requirements.

As for "consumer confusion", it's the current situation (only publishing the rate hikes higher than 10%) which is causing consumers to be confused, because it makes them think that every carrier is jacking rates up that much, as I noted above.

Interestingly, Cigna (which had roughly 2.3% of the ACA exchange market in September) is, rightly so, making the opposite argument:

However, Cigna Corp. was a notable exception. The insurer, which has a pending deal to be acquired by its larger rival Anthem, advocated that all rates—increases or decreases—be disclosed because it “would provide the public with comprehensive information and would increase the transparency of the rate-setting process.”

I have no particular love for Cigna Corp., and their imminent buyout by Anthem doesn't sit very well with me, but they have it right on the nose here, regardless of their motives for doing so.

Anyway, the comment period is closed now, but here's the full list of over 500 comments submitted regarding the new proposed rules.