July 30, 2015

Background Regarding Proposed Health Insurance Rate Increases in Missouri

1. Missouri is the only state in which health insurers are not required to file their
rates, and it is the only state in which the insurance director has no authority
over health insurance rates. The insurance director therefore can neither
disapprove a rate increase nor prevent excessive rates.
2. Under the Affordable Care Act, if a state has no authority to review rates, the
federal Department of Health and Human Services (HHS) must review rates in
that state. Like the Missouri Department of Insurance, HHS has no authority to
disapprove health insurance rate increases. But it does have the authority to
deem a rate unreasonable, to post that finding at its website and to require the
insurer to post that finding at its website. In the past, some insurers whose rate
increases HHS has deemed unreasonable have withdrawn those increases.
3. In the states in which HHS reviews rates, it must also allow the public to
comment on proposed rate increases and must consider the comments in
determining reasonableness. Before this year, that was impossible because HHS
did not make public the key document in the rate filing -- called the actuarial
memorandum. However, this year, for the first time and after Consumers
Council of Missouri (CCM) filed a Freedom of Information Act lawsuit seeking
the actuarial memorandums, HHS has made them public. It turned over a mix of
redacted and unredacted versions of the 2015 Missouri memorandums to CCM
on March 6, and it posted redacted versions of the 2016 memorandums for all
states on June 1 at a new website, www.ratereview.healthcare.gov.
4. HHSs making actuarial memorandums public -- even redacted versions -- is a
major step forward. However, we see no legitimate reason not to release the
entire memorandum. HHS has said in its rate review regulation that the entire
memorandum should be made public; many states make the entire
memorandum public when filed; in those states, making it public has caused no
adverse effect on competition; and even in Missouri at least one carrier filed an
unredacted memorandum for 2016, and several did for 2015. We are therefore
asking HHS to make the entire actuarial memorandum public in the future
unless a carrier, after reasonable notice by HHS, sues to enjoin it. That is a
routine procedure followed by government agencies, and it is the procedure
HHS followed when it made public the redacted actuarial memorandums.