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July/August 2013 St@teside

More States Announce Approved Premium Rates in State-Based Marketplaces

The state of Maryland recently released approved premium rates for the Maryland Health Connection, the state’s state-based marketplace (SBM). As a result of the rate review process undertaken by the Maryland Insurance Administration (MIA), Commissioner Therese Goldsmith approved premiums at as much as 33 percent below what had been requested by the nine insurance companies that will be offering plans in the SBM. Sample rates have been posted on the MIA website.
According to Reuters, an August 1 letter from Aetna, one of the carriers approved to sell its products in the marketplace, to Maryland Insurance Commissioner Therese Goldsmith, stated that it would be operating at a loss under the state's requirement for rate reductions. The rate reductions include products from Aetna and Coventry Health Care, acquired by Aetna earlier this year. It should be noted that Aetna also informed Georgia and Connecticut that the company will not be offering coverage in their marketplaces.

Since the release of the rates, there appears to be some political wrangling on what the numbers mean: the state has been lauded for regulating carriers to offer some of lowest rates in the country, while at the same time being criticized for premiums spiking to 25% higher than in previous years. The Washington Post offered this analysis to explain the challenges of understanding what the rates really mean.

New York Governor Cuomo announced on July 17 that the Department of Financial Services (DFS) approved the premium rates for the insurers planning to offer coverage in the state’s SBM. Among the 17 plans that will be offering starting in October, eight are new entrants to the market. A detailed listing of the approved rates can be found here. As stated in the press release, on average, the approved 2014 rates for even the highest tier of plans individual New York consumers could purchase on the exchange (gold and platinum) represent a 53 percent reduction compared to last year’s direct-pay individual rates.

Earlier in July, Vermont also announced the approved rates for Vermont Health Connect. Given the size of the state, only two carriers will be offering in the SBM, Blue Cross Blue Shield of Vermont and MVP Health Care. Per the rate review process, the state was able to reduce the proposed rates for Blue Cross Blue Shield of Vermont by approximately 4.3% and reduce the proposed rates for MVP Health Care (MVP) by 5.3%.