An Advocate’s Guide to Analyzing Insurers’ Financial Health

When health insurance companies want to raise premium rates, states use a process called “rate review” to decide whether proposed increases are justified. By participating in rate review, consumer advocates can challenge unreasonable premium increases. This guide will help advocates assess the financial status of health insurers and use that knowledge to bolster their arguments for lower rates.

As rate review season begins, consumers, regulators, and policymakers will be reviewing how well health insurance companies fared financially in the previous year:

• How much money are health insurers making?
• And will they need to raise premium rates to remain financially viable? 

​With this guide, advocates can answer those questions.

Insurers share public information about their financial health in two types of documents: proposed rate filings (how the insurer is justifying an increase) and year-end annual statements (data on a company’s finances over time, and, more specifically, during the last year).

We have previously written about how to read and challenge rate filings. This guide explains how to find and understand some important financial indicators from an insurer’s annual financial statement. Consumer advocates can use these indicators to determine whether an insurer’s financial health merits the insurer’s request to raise premium rates, or, on the other hand, whether insurers could do more to keep rates affordable and benefit the community.