What is rate review and why does it matter to you?

By Rosana G. Ferraro |

You’ve probably heard about rate review, rate filings, increases in premiums – here’s what you need to know about it.

One part of the Affordable Care Act (ACA) reformed how individual and small group health insurance plans are priced.  Now those plans are looked over at the state level and have to be approved by the state insurance department before they can be sold to consumers – this is known as rate review.

Who is impacted by rate review?

One important thing to point out is that when you hear on the news about rate increases for insurance, usually what’s being talked about are the requests insurance companies have made to raise rates for the individual and small group markets.

Individual health insurance plans (individual market plans) are for people who do not have insurance through their employer, Medicaid, or Medicare.  Individuals can buy plans either on the exchange (in Connecticut, that’s Access Health CT), or off the exchange, sometimes through a health insurance broker or from the health insurance company directly.

Small group plans (small group market plans) are for small businesses of 50 employees or less.  Just like individual plans, small group plans can be purchased on the exchange (yup, Access Health CT) or off the exchange, again, sometimes through a health insurance broker or directly from the health insurance company.

So what is rate review?

The Connecticut Insurance Department has a resource about rate review in Connecticut, but it basically goes like this:

1. Health insurance companies have to submit rate filings by a deadline set by the Connecticut Insurance Department. They provide information on the individual and small group plans they want to sell for the next year either on or off the exchange (or both).  Rate filings include the proposed rate increases and decreases for the plans the company is selling, and the reasoning behind the requested rate increase or decrease.
2. The Connecticut Insurance Department reviews all the information submitted in the rate filings, specifically looking at whether rates are excessive.

Note: When the Insurance Department is looking at excessive rates they are determining if insurance companies are asking for rates higher than they need to cover health insurance claims and administration of the plan.  Excessive has not been interpreted to mean “excessive for the consumer,” even though we know that the cost of health insurance is unaffordable for many individuals and small businesses.

3. The public has the opportunity to comment online about the proposed rates through the Connecticut Insurance Department website.
4. There are often public or informational hearings about some of the rate filings. These tend to be on a weekday, in the middle of the day, at the Connecticut Insurance Department.
5. The Connecticut Insurance Department will then make a decision to approve the rate requests, a higher than requested rate, or lower than requested rate depending on the information gathered during the review and hearing process.

Some Frequently Asked Questions

I get my insurance from my job – do these rate increases impact me?

The requested rate increases are for individual and small group plans – so if you work for a small business of 50 employees or less, rate increases are likely to make health insurance more expensive for your employer.  How your employer handles that expense will be different for every small business.  It could lead to more out-of-pocket costs for you and your family, but the only person who has a definitive answer for you would be your human resources department.  And as these rates are not yet final, it might be hard for your employer to know just yet.

I buy my insurance on Access Health CT (state exchange), do these rate increases impact me?

The answer to this depends on whether or not you are eligible for subsidies – see below!

I get a subsidy to help me pay for my health insurance premiums, so what does this mean for me?

If you qualify for a subsidy on Access Health CT that helps pay for your premiums, you are much less affected by increases in premium rates.  The financial assistance will usually help cover the increase in premiums – but you should always look at your options every year to make sure you’re getting the best plan for you and your family.  Also, you should know that if your income changes, so will your financial assistance.

I don’t get any financial help to pay for my health insurance through the exchange (Access Health CT) – what do the requested rate increases mean for me?

Unfortunately, you and your family will likely be impacted if rate increases are approved – your monthly premiums will go up.

While you may see an average rate increase, the key word here is average – some plans offered by the health insurance company may have higher than average rate increases, some may have lower than average increases, and some plans may see a rate decrease.  How much you pay also depends on your age and where you live.

So no matter what happens, you should always look at your options every year, both on Access Health CT and off the exchange, to make sure you get the best plan for you and your family.

I am on HUSKY / Medicaid – do these rate increases impact me?

No – rate review is for individual and small business private insurance plans.

I am on Medicare – do these rate increases impact me?

No – rate review is for individual and small business private insurance plans.

Have a question about rate review or story to share?  Email info@universalhealthct.org.

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