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Life Health > Health Insurance > Your Practice

New York: Health Rate Filings Are Public Documents

By Elizabeth D. Festa

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The New York Department of Financial Services has rejected health insurers’ argument that individual and small group health rate filings should not be made public.

The New York department has told the insurers’ lawyers that it intends to terminate a New York law exception that has been keeping the rate filings confidential.

Insurers have argued that the rate filings are trade secrets and ought to be protected.

Department officials say in a letter to the insurers’ lawyers that the insurers’ “arguments for continuing to shroud their rate filings in secrecy are unpersuasive.”

Officials told the health insurers last week that public policy considerations and state and federal law support the department’s finding that the department can disclose the insurers’ rate filings to the public. Increasing rate filing transparency should help slow increases in the cost of health coverage, officials said.

In the past, New York state has provided health rate filings an exemption from the usual state Freedom of Information Law public records disclosure requirements. The New York department notified insurers of its intent to change that rate filing policy in an e-mail sent Sept. 23.

“The public policy benefits to transparency are clear and overwhelming,” department officials said in the letter. “The law reinstituting prior approval of health insurance premiums was passed in response to the continuing rapid rise of those premiums and in the hope that transparency and review would help slow that rise.”

The disclosure of rate materials will reveal information about insurers’ efforts to determine which groups have the lowest level of claims risk, officials said. “But one of the major goals of both New York and federal policy is to require insurers to compete not based on their ability to manipulate markets to manage risk, but rather based on quality and efficiency,” officials said.

Filings by the same companies in other states are already public, and federal law now mandates public disclosure of much of the information, officials said.

Earlier, lawyers for BlueCross BlueShield of Western New York and BlueShield of Northeastern New York wrote to the New York department to argue that the health insurance rate information is too sensitive to be disclosed and that disclosure would result in harm to its competitive positioning in the market.

The lawyers referred to Section 87 of the state Public Officers Law, which provides an exemption from public disclosure for records that are trade secrets.

Other health insurers have written to the department to make similar arguments. Aetna Inc., for example, argues that public disclosure  of its rates in the demanded format would result in “substantial and irreparable injury” to Aetna and would allow competitors  to develop predatory products and pricing structures that would erode Aetna’s market share.

Lawyers for Excellus Health plan and units of UnitedHealth Group Inc. and CIGNA Corp. have made similar arguments, contending that price information is a trade secret, and that disclosure of pricing information would affect insurers’ competitive position in the market.

Several insurers have cited the ruling on a state law case, Encore College Bookstores Inc. vs.  Auxiliary Services Corp. of the State University at Farmingdale case.

The New York department shot back by citing the rulings in Verizon New York, Inc. v. Devita, and Verizon New York, Inc. v. Mills, stating that “an agency’s discretionary authority to disclose records is unaffected even if the records may be withheld pursuant to the Trade Secret/Competitive Injury Exception, i.e., even if disclosure of the records will cause competitive injury, an agency is within its discretion to release such records.”

In the Verizon ruling, an appellate division court held that franchise reports filed by Verizon  and which “contained a trove of information compiled by Verizon that would allow Cablevision to target Verizon’s actual and potential customers with respect to various services,” may be released by such municipalities as an exercise of discretion, notwithstanding the fact that the franchise reports were subject to the Trade Secret/Competitive Injury Exception, the New York department told the insuers’ lawyers.

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