Alabama to scrutinize the rates of ACA plans for the first time

The state was one of six that initially failed to create an effective rate review program at around the implementation of the ACA

Life & Health

By Lyle Adriano

For the first time since the state’s Affordable Care Act (ACA) marketplace launched in 2013, Alabama’s insurance regulators are set to assess exchange plans with pending rate increases next year, reported al.com.

Specifically, the state’s regulators will be taking a look at those plans that have requested for rate increases over 10%.

Alabama was one of six states that failed to create an efficient rate review program by the time the ACA marketplace was established—this, despite receiving a $1 million grant to bolster the state Department of Insurance’s oversight, said the Centers for Medicare & Medicaid Services.

In April, state officials informed federal regulators that they intend to conform to rate review regulations. Alabama Department of Insurance chief of staff Mark Fowler confirmed that the agency had reached an agreement with federal officials to develop an effective rate review.

"This will be the first time we've done this with the exchange plans," Fowler remaked.

"Effective rate review is really meant to offset the impact of a non-competitive market," Kaiser Family Foundation associate director Cynthia Cox said, supporting the move for rate reviewing.

To date, Blue Cross Blue Shield of Alabama is the only insurer remaining in Alabama’s health insurance marketplace. Both UnitedHealth and Humana previously announced that they would withdraw their plans from the market in 2017.

Blue Cross Blue Shield needs to submit its proposed rate changes to the state Department of Insurance by July 15. After submission, the Department has 30 days (or more, if the insurer changes a part of its proposal) to review the proposal before it announces its findings.

The state does not have the power to reject rate increase requests, said Fowler, but regulators can attempt to determine whether the insurance costs are justified or otherwise. Regulators have planned to publicly disclose information on the proposed rate changes either through the agency’s website or through public records requests. Department officials, however, are still thinking of better ways to publicize its findings, Fowler pointed out.

The state’s open enrollment period starts this November and ends January 2017.

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