HB 1711 -- Review of Health Insurance Premium Rates

Sponsor:  McNeil

Beginning July 1, 2012, every health carrier that issues a health
benefit plan form must file its premium rates, classification of
risks relevant to the form, and sufficient information to support
the premium to be charged to an enrollee or policyholder with the
Director of the Department of Insurance, Financial Institutions
and Professional Registration no later than 60 days prior to the
premium effective date.  Plan forms, rate filings, and supporting
information will be public records and posted on the department's
website.  Each rate filing must include the product form number
and the approval date of the form to which the form applies, an
actuarial justification, and information sufficient to support
the rate including explanations that can be validated by a
qualified member of the American Academy of Actuaries (MAAA).  A
rate filing from a health carrier must be submitted by a MAAA-
qualified actuary that certifies by a conclusive statement and
supporting documentation that the rates are not excessive,
inadequate, or unfairly discriminatory.

All health benefit plan premium rates must consider and be in
accordance with past and prospective losses, current and
projected loss ratios, past and prospective expenses, health
services utilization trend projections, current and projected per
enrollee per month premium allocations, three year rate increase
history, and adequacy of contingency reserves.  Any risk
classification, premium rates, and all modifications cannot
establish an excessive, inadequate, or unfairly discriminatory
rate.  An excessive rate is a rate that is unreasonably high for
the insurance coverage provided and an inadequate rate is a rate
that is unreasonably low for the insurance coverage provided and
is insufficient to sustain projected losses and expenses.  A rate
that is unfairly discriminatory is an unfair trade practice.  The
department director must review the proposed health premium rates
including the submitted information and determine if the rates
are excessive, inadequate, or unfairly discriminatory within 30
days from the date of the rate filing.

When a health carrier files a significant rate increase for
approval by the department, the carrier must notify in writing
all affected enrollees and policyholders of the proposed rate
increase.  Within 10 days of receipt of a significant rate
increase filing, the department director must set a date for a
public hearing which must be held within 30 days after the
department receives the filing to discuss the rate increase and
to allow public testimony from proponents and opponents of the
rate increase.  The department director must consider the public
testimony when determining whether to approve or disapprove the
rate increase and decide whether to approve the rate within 20
days of the hearing.  A health carrier can appeal a decision of
the department director to prohibit the proposed rate as
specified in the administrative rule process.  A health carrier
must notify all enrollees and policyholders in writing within 10
days of the department director's determination on a premium rate
increase.  A policyholder or enrollee can appeal the department
director's determination of a proposed premium rate increase
through the administrative hearing process if the policyholder or
enrollee pays all or a majority of the health insurance premium
and the proposed rate increase is 8% or more for the same
coverage or 20% or more for expanded coverage.  A policyholder or
enrollee is limited to one appeal for or during the new policy
period.

The bill contains an emergency clause.

Missouri House of Representatives
Last Updated February 24, 2012 at 4:33 pm