Patrick-Murray Administration's Division of Insurance Receives $1 Million Federal Grant Targeting Enhanced Health Insurance Rate Review
Funding will be used to improve availability of information for the public, and improve technology and actuarial services
The grant will be used to work toward improving public access to rate and reimbursement cost information, and will also be used to improve technological and actuarial support of the rate filings.
"Thanks to Governor Patrick's leadership, the Division of Insurance is taking a more robust look at health insurance rate filings than ever before. We are thankful that through the Affordable Care Act, we were able to win this funding," said Joseph G. Murphy, the Commissioner of Insurance. "We have made significant strides in the last year in how we review rates, and for the long term we are dedicated to creating the best process possible."
The grant is part of $46 million in awards announced this week by HHS, delivered to 45 states and the District of Columbia. The grants are part of the landmark Affordable Care Act which will reform the health-care system in the United States. This is the first cycle of grants in a five-year, $250 million plan.
Recognizing that small businesses and working families are drowning under the weight of skyrocketing insurance premiums, in February Governor Deval Patrick directed the Division of Insurance to use its existing authority to review health-care rate increases before the rates go into effect. In April, using the authority to disapprove rates unreasonable or excessive relative to the benefit provided, the Division disapproved 235 of 274 rate filings. In July, the Division requested additional rate information from three carriers. Since then, the Division has negotiated rate settlement agreements with five carriers, delivering savings to 93 percent of the small-group market, which consists of small businesses and indviduals.
The grant will allow the Division to commission various studies to evaluate market conditions and structures that affect the cost drivers leading to rate increases, as well as examine utilization, technology and unit cost trends in the market while looking at ways to impact the increase in health costs. Additionally, the Division will work with consultants to examine materials that focus on an individual company's rate factors and develop tools to question the assumptions carriers use when developing rates. The Division also intends to develop new tools to track claims trends and administrative costs, so spending can be tracked and models developed for review.
"A robust review of filings ensures carriers are setting rates that are fair to consumers while at the same time satisfying solvency requirements and policyholders' expectations," Murphy said. "We not only need all the information possible from carriers, but we also need more tools to review and interpret that information. This grant will help us do just that."
For more information on the Division of Insurance and the review of health insurance costs, visit www.mass.gov/doi. The website includes stories from small-business owners struggling with insurance costs, and source information including testimony from Division's hearings across the state. The Division of Insurance is an agency within the Office of Consumer Affairs and Business Regulation. Follow the Office at www.mass.gov/consumer, its Consumer Connections Blog and at its Twitter feed, @Mass_Consumer.