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Insurance rate review bill closer to law in Missouri than ever before, but will it do anything?

Adrian Clark | Flickr

Legislators are scheduled to meet Thursday to consider a bill that would give Missouri’s regulating agency for insurers the chance to review health insurance rates before they affect consumers who use Healthcare.gov —and allow them to object if prices are about to jump too high.  

The “Missouri Health Insurance Rate Transparency Act” is part of a measure that bundles together a series of health-related proposals, some of which may be eliminated during the conference process in the last weeks of the session. But this is the furthest a rate review measure has ever gotten in the legislative process, said Joan Bray, a former state legislator who has championed the issue for almost a decade.

“This is a real breakthrough, absolutely. But the law doesn’t say, 'The insurance company must change them'… and that’s the big shortfall,” Bray said, who has retired from the Consumers Council of Missouri but remains in an advisory role.  

The law instead gives the Missouri Department of Insurance, Financial Institutions and Professional Registration a chance to determine if a rate hike is unreasonable ahead of time, notify the insurer and request a change. If the insurer moves forward with a rate that has been deemed unreasonable, the agency can make the determination public. But it cannot reject those increases.

The rates affect about 350,000 Missourians who are eligible to purchase an individual health plan on Healthcare.gov each year. Because the state legislature has repeatedly voted not to expand Medicaid coverage, about 109,000 Missourians are not eligible for federal subsidies to make insurance plans more affordable on the exchanges. 

In general, rate-review laws require health insurance companies to file their price increases ahead of time, so that the public can submit comments and the states' insurance departments can approve or reject those rates. Missouri is one of five states without a process that meets guidelines established by the federal Centers for Medicare and Medicaid Services, so the responsibility of rate review for individual health plans is taken on by the U.S. government.

“I’d much rather have the state do it, because they’re local and they know what’s going on,” said Gary Osborn, an insurance agent in Springfield and a member of the Missouri Association of Health Underwriters.

According to the measure’s fiscal notes, the rate review process would cost about $300,000 a year, most of which would be covered by filing fees from insurance companies. 

The measure comes as two insurers — UnitedHealth Group and Humana — say they are pulling out of the exchanges for individual health plans in some states, citing financial losses. Economists say that fewer insurers in the marketplace could reduce competition and cause prices to rise in some areas.

“The rate review bill is a step in the right direction of transparency; however, I feel that the fiscal solvency of the Affordable Care Act will be the most important issue to resolve immediately,” wrote Rep. Justin Hill, R-Lake St. Louis, who is also a consultant for employee benefits.

“Rate reporting is wonderful, but what use is it if there is only one insurance carrier left to report rates?”

Follow Durrie on Twitter: @durrieB

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