Alabama: Rate Review at last...but don't expect 2017 rate hike requests until August 1st...


As I noted this morning, while I've managed to track down the requested rate hikes for 31 states & DC so far, the remaining 19 states could take awhile. Michigan won't be posting theirs for another week or so, other states could be longer...and then there's Alabama:

Health insurance companies that want to raise rates more than 10 percent next year will get an extra dose of scrutiny from Alabama regulators this year – for the first time since the marketplace launched in 2013.

Under Obamacare, states were supposed to implement systems for reviewing, and in some cases rejecting, rate increases that exceed 10 percent. Alabama was one of six states that didn't create an effective rate review program, despite receiving a $1 million grant to bolster oversight at the Department of Insurance, according to the Centers for Medicare & Medicaid Services.

In April of this year, state officials notified federal regulators that they planned to comply with rate review regulations. Mark Fowler, chief of staff for the Alabama Department of Insurance, said the agency reached an agreement with federal officials to create effective rate review.

Until recently, Missouri didn't even have the legal authority to review rate hikes of any level, much less require changes. Alabama has always had the ability to do so, but didn't bother until this year, which isn't exactly a flattering fact. Still, good to hear that they've decided to go ahead and do so. Unfortunately...

Blue Cross Blue Shield of Alabama is the only company that still remains in the health insurance marketplace in Alabama. UnitedHealth and Humana announced earlier this year they would not offer plans in Alabama in 2017. Open enrollment starts in November and ends in January 2017.

"Effective rate review is really meant to offset the impact of a non-competitive market."

In other words, if it weren't for the rate review process, BCBSAL could presumably jack up their rates as high as they wanted. Yes, there's still the 80/20 Medical Loss Ratio rule, but technically speaking, that doesn't actually prevent a carrier from price gouging during open enrollment, it just means that they have to pay the difference back next year. This may seem like a semantic nitpick, but it's an important distinction.

Oh, another important clarification: I'm not entirely sure about this, but there may be a few other carriers offering off​-exchange individual policies next year, such as Golden Rule, Philadelphia American Life Insurance and so forth, although I'm not sure about that (these might be short-term policies only, or they may be "placeholder" filings along the lines of the still-mysterious "Freedom Life" situation).

Getting back to the title of this entry, however...

Blue Cross Blue Shield of Alabama must submit proposed rate increases to the Department of Insurance by July 15. The department has 30 days to review them before announcing its findings. That process could take longer if Blue Cross changes any part of its proposal, Fowler said.

Fowler said the state will not have the power to reject proposed rate increases, but regulators can try to determine whether insurance costs are justified or not. The plan right now is to make that information public either through the Department of Insurance website or through public records requests. Department officials are still determining the best way to publicize its findings, Fowler said.

Koko Mackin, a spokesman for Blue Cross Blue Shield of Alabama, wrote in an email that proposed rate changes should be publicly available on August 1 through a website set up by the federal government. At that time, consumers can reach out to the Department of Insurance to comment on proposed increases.

By the time August 1st rolls around, other states such as Rhode Island and Connecticut will likely have already started publishing their approved rate changes, so I'll have to be careful to distinguish between the different statuses of each state.