New York Health Insurers Capitulate on Call for Transparency

Amidst the clamor surrounding New York-based health insurers making rate increase filings public, seven more health insurers followed UnitedHealth’s lead in agreeing to disclose such information.

The insurers, Aetna Health, EmblemHealth, Empire HealthChoice, Excellus Health Plan, HealthNow, Capital District Physicians' Health Plan, and Connecticut General Life Insurance Co. — represent 90% of the health insurers whose rate increases are subject to New York regulators’ approval.

In previous communications, the insurers objected, claiming that release of rate increase filings would results in competitive disadvantage. However, on Thursday, the insurers changed direction, offering agreement to the requirement. A spokeswoman for Aetna Health, quoted in the Wall Street Journal, said it supported disclosure "provided there are clear standards on what information will be made publicly available and ensure that the standards apply to all carriers equally and consistently."

A law passed in 2010 requires insurers to seek the prior approval of the Department of Financial Services for certain health insurance rate increases. The insurers are required to support their rate requests with substantial detailed supporting data. Previously, those detailed filings were kept confidential. But sources in New York’s department of insurance have pressed to follow 12 other states that currently require insurers to make rate setting requests public.

Under the agreement with New York, the companies would have their rate-setting applications posted on a state website. Those applications contain the necessary information to determine whether a premium increase is justified, including:

• A summary of the amount of money the insurer spent in the last two years on medical claims, which is used to project future claims expenses. Commonly referred to as "medical trend," this information is the basis of the premiums paid by policyholders.

• The actuarial memorandum, which specifies all of the actuarial assumptions used in analyzing how much medical claims are going to be in the coming year.

• The amount of administrative expenses and profits.

• A list of all benefit changes, such as copayments or drug benefits, which have been made to the policy.

• Which policies are affected by the rate increases, which geographic regions will be getting increases and the number of policyholders affected.

Benjamin Lawsky, Superintendent of the Department of Financial Services, said, "It's absolutely essential for the public to know the basis for proposed rate increases – these filings should not be treated like classified material that only a select few may know. Transparency here will allow the public to rigorously comment on proposed rates and will also help promote competition. I applaud UnitedHealth and its CEO Jeff Alter for stepping up and becoming the industry leader when it comes to transparency. The rest of the industry should now follow UnitedHealth's lead and end their policy of secrecy once and for all."