Consumers Can Review Health Insurance Rates At New State Website

By Anne Knowles | 4:04 pm September 2nd, 2011
Updated 4:10 pm September 2nd, 2011

Nevada consumers and small businesses can now review and comment on rate hikes in their health insurance policies online.

The Division of Insurance has launched Nevada Health Rate Review in compliance with a provision of the Affordable Care Act (ACA) that went into effect on Sept. 1.

The federal law requires the state to provide a way for individuals and small businesses to comment on proposed rate hikes. All rate changes for individual, small business and HMO policies must be submitted to the division for approval.

Rates are the base price for a policy; an individual policy may cost more due to medical conditions or other factors specific to each policy holder.

When an insurance provider applies for a rate change, the division will post the application and all the supporting documents with a summary of the proposed change. Visitors will have 60 days to review the material and post a comment, either privately or publicly.  Comments will be reviewed daily by a division actuary, according to Jake Sunderland, the division’s public information officer, and included in the final application.

The law does not require the state to analyze the comments, but the division plans to review and factor them into its decisions. This is one way the state plans to go “above and beyond the law,” said Sunderland. Another way is that the state will review any change in rate, even drops, although the law only requires reviews of rate hikes of 10 percent or greater.

The site already has about one year of previously-decided or pending applications posted online and will post three new applications next week on which consumers can review and comment before the state rules.

So far this year, the division has received 87 applications for rate hikes. It has denied 23, modified four to a lower rate, has 25 pending and has approved 35.

Previously, consumers had to make public records requests to gain access to the applications.

“Bringing greater transparency to families and businesses and giving them easy access to information will help them make better decisions about their health insurance options,” said Annette Raveneau, a spokeswoman with Know Your Care, a nonprofit established to educate citizens about the ACA. “Because of the Affordable Care Act, insurance companies will no longer be able to raise rates without explaining their actions. Rate hikes will be posted on public websites and will have to be justified.”

Part of the goal, says Sunderland, is to give individuals and small businesses more power when dealing with insurance providers. Large corporations are not included because they have the clout and expertise to negotiate more favorable rates.

Sunderland said there are 12,508 policies sold to small businesses in the state, insuring 102,728 people. There are currently 57,681 policies sold to individuals covering 87,309 people.

To comply with the federal law, the Nevada Legislature passed a bill during the 2011 legislative session giving the state the authority to collect rate information on health insurance policies held by businesses with between two and 50 employees.

The insurance division plans to soon start running public service announcements to make the public aware of the new website, said Sunderland.

As part of the ACA, the rate review and website has its detractors.

“The reason a website like this has become necessary is that policymakers’ decision to turn the health care industry into a regulated utility will ultimately deprive consumers of alternatives,” says Geoffrey Lawrence, deputy director of policy at Nevada Policy Research Institute in Las Vegas. “On the exchange, prices and products will homogenize, meaning that consumers will have less opportunity to switch providers in the event of a rate increase.”

Lawrence says stricter regulations will also increase the barriers for potential new providers to enter the market.

“With nowhere to turn, consumers can only complain to regulators, as is the case with other regulated utilities,” said Lawrence.

The rate review process is just one provision of the ACA the state is working on to comply. The Nevada Department of Health and Human Services this week requested $2.8 million in a federal grant money from the legislature’s Interim Finance Committee to create the agency and fill four staff positions to run the Silver State Health Exchange, the state exchange for health insurance mandated by the law. The exchange must be up and running in 2014.

Gov. Brian Sandoval’s office said the appointments to a board to oversee the exchange will made by the end of this month.

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