The Division of Insurance held public hearings today regarding their emergency regulations promulgated last month in an effort to provide premium relief to small businesses. Several organizations testified including the Massachusetts Association of Health Plans and Blue Cross Blue Shield of Massachusetts (BCBS).
The most controversial part of the emergency regulation, 211 C.M.R. § 43.08, requires that HMOs file proposed small group rates (or changes to previously filed rates) at least 30 days before their effective dates. Along with the rates, HMOs must file actuarial support to justify any increases and they must also file a description of the basis for differing rates among similarly situated providers (including the quality of care, patient mix, geographic location of the provider, and complexity/intensity of services provided).
The Commissioner of Insurance will then evaluate the rates, including an analysis of the data supporting price increases. If the Commissioner then determines the rates to be unreasonable or excessive in relation to the benefit conferred, he may disapprove the rates. If the Commissioner disapproves rates, he must do so on or before the effective date (tomorrow, April 1 for the first filings made under the regulations). The HMO may then request a hearing on the disapproval to be held within 30 days.
The insurers argued that the regulations do not take into consideration market forces behind HMO pricing. As a result, caps on prices will be arbitrary and insurance companies will sustain losses which will be felt across the Commonwealth. HCFA, in its written testimony (pdf), lauds the Governor for prioritizing the rate issues facing the individual/small group market. To us, the public has a right to understand what is behind premium increases for individuals and small groups. The Division of Insurance has long had the responsibility of reviewing rates and disapproving unwarranted rate increases in order to ensure stability in the market.
We expect to soon learn of DOI’s decisions for the next round of premiums.