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Rate Review Laws Could Reduce Health Insurance Costs, Consumer Group Says

Adrian Clark | Flickr

On Monday, Missourians had their first glimpse at the health insurance rates they can choose from on the federal exchange. According to some, that shouldn't have been the first time the information was public.

Missouri is one of only a few states that does not have a state entity tasked with reviewing health insurance rates before they are finalized. Consumer groups say that means Missourians might be paying more for health insurance on the federal exchange than they should be. 

Groups, including the Consumer Council of Missouri, have pressed the state legislature to pass “rate review” laws which would allow health insurance costs to be reviewed by state regulators or the public before they are finalized. That process leaves room for negotiation, said CCM director Joan Bray, a former Democratic state legislator.

Missouri is one of less than a handful of states that do not require health insurance companies to submit pricing information to a state regulator before the plans are available for enrollment.

“Other states that have rate review found their rates in a timely way. They got them analyzed, in some cases they got them reduced,” said CCM director Joan Bray, who is a former Democratic state legislator.

The Missouri Department of Insurance website says that as an open competition state, Missouri “relies on competition among companies to determine the premium rates.”

Under the Affordable Care Act, states without rate review laws rely on the Centers for Medicare and Medicaid Services to review cost justifications for plans sold on the federal exchange, Healthcare.gov.

In September, CCM filed a request to the federal government to release the names of insurance companies, their rates and price justifications for Missouri health insurance plans before they appeared on the federal exchange. The request cited a part of the Affordable Care Act that the group alleges requires a public comment period for proposed health insurance rates. When the request was denied, CCM filed a law suit. The litigation is ongoing.

“Missouri is the state which has taken the most extreme, hands-off position with respect to the Affordable Care Act. It just makes it more important that the federal government act,” said Jay Angoff, CCM’s attorney. Angoff himself served as Insurance Commissioner for the state of Missouri in the 1990’s, and later worked for the U.S. Department of Health and Human Services.

The lack of rate review by a state agency for Missouri plans delayed consumer research for at least one group. Saint Louis University Law Professor Sidney Watson said her students have spent the week researching the new insurance rates for the state’s eight regions.  She says the federal government does publish notices when rate increases are deemed unreasonable, but few consumers know where to look.  

“Almost every state [has] moved to having its own rate review process,” Watson said. “We got left behind.”

Watson said her next step will be to compare insurance prices in Missouri to changes in other states that have different rate review processes. 

Spokespersons for Anthem Blue Cross and Blue Shield in Missouri, and Coventry Healthcare were not immediately available for comment.