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Monday, February 13, 2012

The End of Unexplained Insurance Rate Increases in New York

Caety Chong

Staff Writer

Advocates in New York recently celebrated a huge victory for health care consumers. Their efforts resulted in the public disclosure of insurer filings for all premium rate increases, guaranteeing greater transparency for consumers. New York advocates faced many challenges along the way, but ultimately their perseverance and resourcefulness led to this tremendous achievement.

Back in June of 2010, the state of New York enacted a "prior approval" law, granting the Department of Insurance the authority to approve all insurance premium rate hikes before they take effect. Insurers must report any rate increase - no matter how big or small - to the state Department of Insurance. While this was a victory in itself, insurers and the department initially claimed the rate applications contained trade secrets and, consequently, concealed them from the public.

Later that summer, Allan Evans, a consumer in New York, contacted the Community Service Society of New York (CSS) Consumer Assistance Program after he received a notice under the new prior approval law informing him that his premium would increase by 76 percent - a hike that his insurer, Emblem, falsely attributed to the Affordable Care Act. CSS contacted the insurance department, and the department ordered Emblem to reissue its notice clarifying that the health care law was not the cause of the increase. Even after resubmitting the notices, Emblem still failed to explain the reason for the increase and refused to release its data. CSS submitted a request for information under New York's Freedom of Information Law (FOIL), but the Department of Insurance ruled in Emblem's favor.

To better understand the systemic problem of excessive rate increases, Health Care for All New York (HCFANY) spearheaded a coordinated effort to file 10 detailed objections to the next round of rate hikes (August 2011). The Department of Insurance then posted the letters, including the objections, along with moving consumer testimonials on its website to illustrate how rate increases adversely affect consumers. HCFANY sent a summary of these complaints to the state Senate Insurance Committee and the state Assembly Insurance Committee, urging them to investigate the situation.

In September 2011, The New York Times published an article about the premium hikes and the insurers' habit of maintaining secret files. The article described how CSS's FOIL request was still pending and pressured the state to decide if it would stand with consumers or carriers regarding the release of rate requests. The insurance companies' resistance attracted further negative press coverage that highlighted harmful industry practices. As public pressure reached a crescendo, the superintendant of the Department of Financial Services advocated for the public release of all company files. Finally, UnitedHealthcare and Oxford agreed to publicly release their files. Continued pressure from state agencies, advocates, and the public caused Aetna Health, EmblemHealth, Empire HealthChoice, Excellus Health Plan, and HealthNow to follow suit.

This victory is attributable to the steadfast advocacy efforts of HCFANY. Advocates used every resource available in order to bring about greater transparency and stronger consumer protections in the rate review process. When confronted by obstacles, they went out of their way to conduct rigorous research, highlight a compelling consumer story in a major media outlet, draft objections to the state insurance department, and publicly push government officials on the issue at hand.