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CMS Releases Proposed Health Insurance Rates

By Rebecca Adams, CQ Roll Call

June 2, 2015 -- The Centers for Medicare and Medicaid Services (CMS) began posting proposed health insurance premium rate hikes of more than 10 percent online last week in response to a 2014 lawsuit—which was filed by a former top Obama administration health official.

"What HHS announced today is a huge step forward," said Jay Angoff, a former top Health and Human Services (HHS) advisor to then-Secretary Kathleen Sebelius whose law firm sued the agency. He said that the agency had committed in a March court brief to releasing the data.

"We're very pleased that it has followed through on that commitment, and its having done so should have a beneficial effect on the rate review process," Angoff said in an email last week. The firm, Mehri & Skalet, PLLC, had filed on behalf of the Consumers Council of Missouri on Sept. 30, asking HHS to release previous rate filings and to post future rate filings in time for the public to comment on the proposals before they are finalized for the following year. In some states, including Missouri, rate filings have never been public before.

Angoff said that some insurers chose to redact information that they claimed is a trade secret. One insurer redacted almost everything in its actuarial memorandum, a document that contains important details about how the company set its premium rates. Angoff said that he would keep pushing for greater transparency.

"It shouldn't be forgotten that HHS disregarded both the law and its own representations on its website when it failed to release either the 2014 or 2015 rate filings until after rates had already been implemented," said Angoff. "Nevertheless, taking a glass-half-full attitude, HHS's announcement today should really be applauded."

The proposed rates could change under pressure from state insurance commissioners, federal regulators or the public.

"But this year the health plans have hard claim data to show the regulators and a 35 percent rate increase is hardly going to be rolled back to 5 percent," said Robert Laszewski, a health insurance industry consultant.

The rates also cannot predict how much an individual will end up paying for coverage, because many people who buy insurance through the marketplaces are eligible for federal subsidies. More than 8 in 10 people who bought a marketplace plan through last year qualified for an average tax credit of about $263 per person per month. After subsidies were taken into account, about 8 in 10 people who bought insurance through states could have bought a plan for less than $100 per month after subsidies.

"The rate review process kicks off an important set of steps designed to provide consumers and others the opportunity to weigh in on proposed rate increases of 10 percent or more," said CMS Acting Administrator Andy Slavitt. "These specific rates will be subject to vigorous rate review and revision and the final rates consumers will see this fall will reflect the breadth of choice and competition in the marketplace."

The information is available for health insurers who operate within newly created marketplaces as well as those who provide insurance outside of the marketplaces.

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