PPACA: NAIC Postpones Decision on Rate Form

Joan Gardner, executive director of state services at the Blue Cross and Blue Shield Association, Chicago, also is asking the NAIC to keep large group coverage out of the rate disclosure process.

"The large group market usually is rated based on: (1) the particular employer's experience, or (2) a blend of the particular employer's experience with that of the overall pool," Gardner says. "This means that the rate increase is unique for each employer and a disclosure form potentially would be needed for each large employer whose rate increase meets the 'unreasonable' criteria."

Large employers often use consultants to help them get low rates, and they can self-insure if they think insurers are trying to charge them too much, Gardner says.

Because of the resources large employers have at their disposal, the large-group rate disclosure forms would have limited value, Gardner says.

"We recommend, at most, the disclosure form be required for large group coverage only when state regulators are investigating specific complaints from large employers," Gardner says.

PHYSICIANS AND CONSUMERS

The American Medical Association, Chicago, and the individuals who represent consumers in NAIC proceedings have asked the NAIC to require health carriers disclosing rate changes to give information about matters such as executive salaries and benefits and broker commissions.

The consumers note that carriers want to be able to ignore random fluctuations in relatively small pools of business that "lack credibility" when regulators are deciding whether the carriers must pay some premium money back to consumers and employers.

"But shouldn't some requirement of credibility also be imposed on rate increase requests?" the consumer reps ask. "Could not a plan's bad experience in a particular year be due to random variation, and not justify a rate increase for the following year, when expenses may be much lower?"