Pennsylvania Insurance Commissioner Holds Public Informational Hearing on Health Insurance Rate Requests, Hears Testimony from Consumers, Companies, and Other Stakeholders

HARRISBURG, Pa., July 27, 2016 /PRNewswire-USNewswire/ -- Insurance Commissioner Teresa Miller today held a public informational hearing to address proposed rate requests for 2017 individual health insurance plans available through the federal marketplace. The Insurance Department is currently conducting its review of filed rate requests in advance of open enrollment for 2017 health insurance coverage, which begins on November 1, 2016.

"The cost of health insurance and the impact these costs have on consumers is something my department takes very seriously when reviewing requests for rate increases," said Commissioner Miller. "However, cost is not the only measure of impact on consumers. As Insurance Commissioner, I am also charged with ensuring this market is sustainable and that Pennsylvania's consumers continue to have choices when they seek health insurance coverage."

Commissioner Miller explained that many companies are seeing higher spending on medical care than they originally anticipated, resulting in losses on these products. These losses are causing insurers to leave markets around the country, a trend the Insurance Department is trying to prevent in Pennsylvania to maintain the competitive market and ensure consumers continue to have options for their health insurance.

"We need to ensure that Pennsylvania's market is attractive for insurers to sell in as well as for consumers to buy from," said Commissioner Miller. "We must find a balance between those two aims in order to have a competitive and sustainable marketplace."

Commissioner Miller was joined by Johanna Fabian-Marks, Director of the department's Bureau of Life, Accident, and Health Insurance, who began the hearing by detailing the department's rate review process as well as some of the factors staff take into consideration when reviewing proposed health insurance rates.

Before hearing from companies that sell health insurance in Pennsylvania, Art Lucker, an actuary with INS Consultants in Philadelphia, spoke to the Insurance Department and hearing attendees in order to provide a national perspective on the state of health insurance marketplaces around the country. Rate requests from health insurers for 2017 have been a point of concern in multiple states, and Lucker cited multiple factors, including aspects of the Affordable Care Act, that have changed the health insurance landscape and resulted in rate increases.

Lucker detailed three programs in the Affordable Care Act – reinsurance, risk corridors, and risk adjustment – that were designed to help companies control costs and stabilize premiums. The risk corridors program in particular has created challenges for insurers. The program was designed to offset insurers' losses on higher risk plans with gains on lower risk plans. However, gains were lower than expected and the program was made budget-neutral, so many companies have not received the payments they expected. 

"Only 12.4 percent of the [risk corridors] payments were made," said Lucker.

Commissioner Miller then heard presentations from six companies that sell health insurance in Pennsylvania through the federal marketplace. Representatives from Highmark, Aetna, Independence Blue Cross, Capital Blue Cross, UPMC Health Plan, and Geisinger Health Plan explained their rationale in requesting their proposed rates and why they believe the requested increases are necessary. The Insurance Department then questioned the companies on some of the key issues regarding their proposed rate filings and the impact on consumers.

Companies expressed their commitment to provide quality coverage to consumers, but voiced concerns over the uncertainty of the market.

"We've come a long way in a very short time, but the law is not perfect," said Paula Sunshine, senior vice president and chief marketing executive of Independence Blue Cross. "We're trying to balance both access and uncertainty. There are consequences to carriers not getting payments they expect."

After the completion of the presentations, consumers and interested parties who attended the hearing were given the opportunity to offer comments on the proposed rates. Consumers who spoke told stories of their experiences with rising health insurance costs.

"Insurance companies continue to shift these costs on to people every year," said Jacob Hope, an enrollment assister who works in Philadelphia. "These actions have real consequences. Any further increase in costs will push people to [enroll in] worse plans or [to opt] out of the marketplace completely."

Those who spoke voiced concerns that requested rates would make purchasing health insurance coverage too expensive and out-of-pocket costs like deductibles, copays, and coinsurance, in addition to premiums, would create financial burdens when utilizing care.

"I understand that the size of some of these requests is concerning, but I promise you all that my department does not take your comments and your concerns lightly as we continue our review," said Commissioner Miller. "It is important to remember that there are many options out there, and roughly 75% of Pennsylvanians shopping on Healthcare.gov will receive subsidies to help off-set their costs. The Insurance Department is committed to sustaining our health insurance market so consumers will continue to have options for quality and affordable care."

At the conclusion of the hearing, Commissioner Miller reinforced her commitment to making sure consumers are engaged in the rate review process.

"Transparency is something that both I and Governor Wolf take very seriously," said Commissioner Miller, "I hope everyone can leave today with a better understanding of how our review process works and of the various factors we must consider when reviewing these rate requests."

Interested consumers who were unable to attend the hearing are invited to submit written comments to [email protected]. A video of the hearing will be made available at www.insurance.pa.gov in the coming days. Final rates, as well as justifications for the department's decisions, will be available in mid-October.

For more information on rate requests for 2017, including a video on how rates are decided and proposed rates for where you reside, visit the Insurance Department's homepage for Affordable Care Act rate filings.

MEDIA CONTACT: Ali Fogarty, 717-787-3289

SOURCE Pennsylvania Insurance Department