The DC Department of Insurance, Securities and Banking received 162 proposed health insurance plan rates for review from four major insurance companies in advance of the third year of open enrollment on DC Health Link, the District of Columbia’s health insurance marketplace.
These filings mark the beginning of the department’s rate review process where department actuaries engage with the insurers to determine if the rates are reasonable by law and should be approved for sale on DC Health Link.
The same four major insurance companies as last year – Aetna, CareFirst BlueCross BlueShield, Kaiser Permanente and UnitedHealthcare – have proposed rates for individuals, families and small businesses for the 2016 plan year.
The proposed rates are generally higher than last year and increases vary among the insurers; however insurers may submit revised rates during the department’s rate review process. Last year, three of the four insurance companies (Aetna, CareFirst and United) lowered their rates from what was initially filed.
“Prior to the Affordable Care Act, health insurance pricing was not transparent and consumers didn’t always know what they were going to pay for health insurance prior to enrollment,” said Acting Commissioner Chester A. McPherson. “Insurers also didn’t know the prices of their competitors. By publicly releasing the rate information as part of the rate review, insurers compete for District insurance business and consumers can plan for health care costs.”
As insurers enter the third year of DC Health Link, they have refined their plan offerings based on market experience – from 301 plans in 2014, 227 in 2015 and a proposed 162 for 2016. For individuals, 26 plans were proposed: Kaiser (11) and CareFirst (15). In the small business market, 136 plans were proposed: CareFirst (53), United (41), Kaiser (24) and Aetna (18). Aetna is no longer offering plans in the individual market.
McPherson added that additional safeguards are in place to protect consumers from unfair rate increases. The Affordable Care Act requires insurance companies to spend at least 80 percent of the premium dollars they collect on medical care and “improvement qualities,” or reductions in medical errors. These percentages are known as “Medical Loss Ratios” or MLR. “If an insurer does not meet this requirement, it must provide a rebate on the portion of the premium dollars that exceeded this limit,” said McPherson. “This is part of what we look at in our rate review process.”