By Ameet Sachdev
More than half of the states have disclosed just how much higher their health care premiums could be next year under the Affordable Care Act, and some of the potential increases are jaw-dropping.
But Illinois residents won't get their first look at proposed 2017 premiums until Aug. 1, and that has consumer advocates frustrated.
Insurance companies had to submit rate plans for Illinois in April, but the state doesn't require the proposals to be made public upon filing, according to the Department of Insurance. In addition, the director of the department considers health plan filings confidential and exempt from Freedom of Information requests.
The Aug. 1 publication date is about a month before the Insurance Department has to complete its review of rate information, giving policyholders and consumer groups little time to review health plans and challenge any proposed premium hikes. Greater transparency has helped roll back requested rate increases, even in states that, like Illinois, have limited authority to push back on insurers, consumer advocates said.
"We would like to participate in a public discourse about rate plans," said Stephani Becker, a senior policy specialist at the Chicago-based Sargent Shriver National Center on Poverty Law. "Right now there is no public discourse."
Kathy Waligora, director of the health reform initiative at EverThrive Illinois, added, "We have opportunities to have more transparency in the rate review process. We think people will benefit if they have information earlier."
Insurance Department acting Director Anne Melissa Dowling declined to be interviewed for this story.
In response to emailed questions, department spokeswoman Anjali Julka said that until a health plan has been approved by the federal government, the state agency considers rate proposals and related documents to be preliminary and "pre-decisional," and therefore withholds such filings.
Twenty-eight states have disclosed rate proposals to the public as of Monday through ratereview.healthcare.gov. Several, including Indiana, Oregon and Washington, also post the information on their insurance websites. Some of the filings contain trade secrets that are blacked out but rate information is available.
The spotlight is more intense on state insurance regulators as consumers seek protection from soaring insurance premiums on ACA policies. Heading into the fourth year of coverage under the health law, insurance companies in some states have proposed rate increases of 20 percent or more. Blue Cross and Blue Shield of Texas, one of the nation's largest plans, requested an average hike of 53.7 percent.
When asked about 2017 rate proposals, the Illinois Department of Insurance would only confirm that 11 companies have submitted a total of 470 health plans -- 321 individual and 149 small group.
States historically have had exclusive authority to regulate rates for private health insurance, and the 2010 Affordable Care Act did little to change that authority. But the law requires review of proposed premium increases of 10 percent or more to make sure they are reasonable and fair to consumers. The provision included the public disclosure of such rate hikes.
Since Illinois doesn't have its own disclosure law, the Insurance Department follows the federal government's timeline for making rate information publicly available. And this year, Illinois rate filings will made available Aug. 1 on the federal website.
The Aug. 1 federal deadline was pushed back two months this year after insurance commissioners in some states said they didn't have enough time last year to prepare rate filings for public disclosure.
The later publication date, though, is a disservice to policyholders in some states like Illinois where regulatory review is already well under way, said Dena Mendelsohn, a staff attorney at Consumers Union, the advocacy and policy division of Consumer Reports.
Consumer groups would like more transparency in Illinois' rate review process because health insurers hold all the cards in the state. Unlike about three dozen other states, Illinois does not have the legal authority to reject excessive health insurance rate increases.
Illinois is what is known in regulatory jargon as a "file and use" state. Under this framework, rates will go into effect after a certain period of time, but a state can take action later if the rates are found to be unreasonable.
States that have the power to approve and deny proposed premiums are using their authority to hold down rate increases, according to a study of 2015 ACA rates by PricewaterhouseCoopers' Health Research Institute. States with prior approval authority saw a median drop of 2.9 percentage points between the proposed and approved rates, while carriers' rates in file-and-use states dropped less than half as much, with a median 1.3 percentage point decrease.
In 2011, the Illinois Department of Insurance pursued a bill to strengthen its oversight authority over health insurance premiums. But the legislation didn't receive enough support and died without being called for a vote, said Rep. Greg Harris, D-Chicago, who introduced the bill.
Legislation in 2014 that would have made rate-related information public after it is submitted to the Insurance Department didn't make it out of the rule committee.
Under the ACA, the U.S. Department of Health and Human Services provided $250 million in grants to state insurance departments to strengthen their regulatory capabilities and make rate filings more accessible and understandable to consumers.
Illinois received two grants totaling $4.5 million in 2010 and 2011. The Insurance Department used the funds to start actuarial review on all premium increases of more than 10 percent and hired additional staff, including one staffer dedicated to making rate information available to the public, Julka said.
Even as a file-and-use state, the Insurance Department is able to negotiate rates with insurers, Consumers Union's Mendelsohn said. She pointed to the example of another file-and-use state, California, where the department's actuaries analyze rate filings.
The insurance commissioner has criticized health plans for imposing "excessive and unreasonable" rate increases. While such findings are not binding on insurers, the scrutiny and public shaming has pushed carriers to reduce or withdraw rate increases. The California Department of Insurance estimates that it has saved consumers $316 million in health insurance premiums since 2011.
"It's not as if Illinois does not have to power to protect consumers," Mendelsohn said.
According to consumer advocates, Illinois considers the rate review process as a confidential time of negotiation with insurers.
"I do think that this (regulatory framework) comes from a well-intentioned perspective of wanting to help consumers," said Waligora of EverThrive, a health advocacy organization.
But she also says it's time for consumers to have more input in the rate review process. And that starts with making the rate proposals public earlier in the review.
Consumer advocates in Illinois acknowledge that in the first three years of the health law, their top priority was enrolling residents in coverage either through Medicaid or private insurance, not reviewing rate filings. The Sargent Shriver center, for example, helped train enrollment counselors to assist consumer in buying insurance.
"Now that we have more than 1 million people enrolled, we're more focused on the quality of the plans," said Becker of the Sargent Shriver center. "I think you're going to see a groundswell occurring of people demanding more transparency and consumer input."
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