This week, Washington Insurance Commissioner Patty Kuderer announced 13 companies have applied to sell policies on the state’s health insurance marketplace next year. The eye-popping part is that they’re asking to raise monthly premiums by an average 22-percent.
Some are asking for less, some for more. Kuderer’s office will take a few months to review the requests. We asked her about the process.
Patty Kuderer: In a nutshell, they look at what their potential claims exposure is going to be and some other things like their administrative costs and they have assumptions that they protect the medical and prescription drug costs. And then they set their base rate and they ask the insurance commissioner if we would approve those rates ahead of them being implemented.
Doug Nadvornick: So you have, this year, 14 insurers. You've got 13 who are applying for next year. Are they all on individual cases? Or are there ways that you sort of tie them together to get a feel for what the whole insurance market is through all 13 of them?
PK: Each application is individually reviewed and we go through it with a fine tooth comb. So yeah, we are a prior approval state, which is our law.
DN: What does that mean?
PK: That means that we look at the filings. They cannot put those rates into use until we approve them. But if they actuarially justify those rates, we are required by law to approve them. So our discretion is somewhat limited by that.
DN: Your office put out a press release that said essentially the average increase for those 13 companies is over 20%. Can you talk a little bit about that?
PK: Yeah, there are several things driving that. Provider consolidation, especially around hospitals, is increasing costs. We've seen insurers pointing to the costs of claims that are going up. The volume of claims are increasing.
And there's something known as upcoding, which is also having an impact, which is where there's a code for a procedure that is provided that's more costly than maybe what was actually provided. So that is an area of fraud that should be investigated.
DN: So there's an awful lot there for your staff to go through. It takes several months, it sounds like, in order for you to go through each of these line by line and figure out what you're going to grant.
PK: Yeah, what the consumer can bank on is that we go through these applications with a fine tooth comb and there is a lot of back and forth. There's good reason for that, because we want to make sure that the rate increase that's being requested is indeed actuarially justified. If it is not, then we are fully prepared to reduce that rate to what we feel has been actuarially justified.
DN: So as the requests started to trickle in, were you surprised at how much they were asking for this year?
PK: Yes and no. Part of the reason is that I think people are really feeling the pinch of having to pay for health care right now. I think health care is becoming increasingly out of reach for more and more Americans. And it's certainly not something I wanted to see.
But again, with the uncertainty and the volatility out of the other Washington, the failure to pass the enhanced premium tax credits into law—all of that has an impact and the insurance market is responding to that. And again, we'll go through it and make sure that these rates are justified. But if they are indeed justified, we are required by law to approve them.
DN: So how would you characterize the health insurance market in Washington? Is it a robust market right now? I mean, you've got 13 companies that want to offer through the marketplace this year. Or is it a health insurance industry that's not in very good shape right now?
PK: I would say that it's in, I know, 12 carriers. That's a decent number of carriers. I mean, Idaho has five. Montana, I believe, has two. So you can see the difference. We are, you know, I'd like it to be more. I think having more health care companies competing for premium dollars is a good thing.
And so I'd like to see if there are things we can do to increase market stability as well as expanding access to health care. Having more people, healthier people in the market is going to have an effect of reducing the amount that we pay overall. And I think that would be a good thing.
So, you know, it's in good shape. But could it be better? Yes.
