Six months after the U.S. Department of Health and Human Services began reviewing proposed rate increases by health insurance plans, it’s deemed its first rate hike in Missouri to be unreasonable.
John Alden Life Insurance Company’s individual health insurance plan, covering about 2,000 people in the state, has proposed a 15 percent rate increase, effective next month. But HHS says its analysis found that to be unjustified in Missouri and in several other states.
Missouri is one of the only states that does not review or require companies to file rate increases with the state.
Steve Larson, Deputy Director of the Centers for Medicare and Medicaid Services, says the new federal review process for companies that propose rate increases above ten percent benefits residents.
“The rate review provision [of the federal health law] is designed for a state like Missouri,” says Larson. “The Affordable Care Act ensures a baseline of review for all consumers in every state, knowing that in some states there isn’t review authority.”
Alden's rate increase is excessive, according to HHS, in large part because the insurer would be spending a low percentage of its premium dollars on actual medical care.
While companies are now required to file rate increases of over 10 percent, HHS has no authority to prevent the hikes.
Alden’s parent company, Assurant Health, says it took several factors into account when determining its rate increase, including rising health care costs and new federal medical spending rules.
“We believe our recent rate filings are reasonable and necessary,” says Heather McAvoy, with Assurant.
Last fall, Coventry filed two proposed rate increases of about 11 percent in Missouri. HHS found one of them to be reasonable. Coventry withdrew the other request before it was reviewed.
To date, HHS has reviewed 28 proposed increases nationwide and deemed 20 to be unreasonable.
This story is part of a reporting partnership that includes KCUR, NPR and Kaiser Health News.
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