Decision – Approved May 2, 2013
On February 27, 2013, Anthem Health Plans, Inc. filed a request to increase premium rates an average of 9.9 percent for major medical plans for small employer group policies (between 1-50 employees). This request was a revision that sought to reduce a previously approved average increase of 14.8 percent.
Anthem said it is seeking the increase to align rates with “emerging experience, new federal mandates and fees and market conditions.” The company projects an impact of 8.7 percent on premium due to “trend,” increases in medical costs and demand for medical services.
Anthem said the rate change also takes into account new federal insurance and reinsurance fees mandated by the Affordable Care Act. The taxes and fees take effect January 1, 2014 and the policies in question will be in force at that time. The company said the requested adjustment will allow the company to pro-rate for the federal costs.
During the 20-day comment period, the Insurance Department received 11 comments in opposition to the rate change. A summary of the comments are included in the final disposition.
As a result of an actuarial review, the Department determined that Anthem’s projections of costs to pay benefits, additional taxes and fees were appropriate and approved the request on May 2, 2013. The Department noted that the new rate represented a decrease from the previously approved increase of approximately 14.8 percent for the third and fourth quarter of 2013.
The new rates take effect July 1, 2013 for approximately 22,000 policyholders that provide health care coverage for 75,000 employees and their dependents. The company calculated that the new rate would generate the expected 80 percent individual medical loss ratio (MLR), for rebate purposes under the federal health care reform law.