Wall Street Journal: Insurer to Reveal Rate-Hike Data

Oct 26, 2011

The following article was published in the Wall Street Journal on October 26, 2011:

Insurer to reveal rate-hike data

By Leslie Scism and Liz Rappaport

New York’s largest health insurer has agreed to publicly share the previously secret details of its requests for insurance-rate hikes, ending a standoff with state regulators.

UnitedHealth would become the first insurance company operating in the state to voluntarily release proprietary details about why it wants a premium increase, under an agreement with the state Department of Financial Services announced Tuesday, officials said.

Benjamin Lawsky, the department’s superintendent, is pushing for all of the state’s health insurers to disclose such information, trying to join a dozen other states already requiring its release. National health-care law changes could make it easier for states to require disclosure.

The data, once made public, could help consumer-health advocates make more convincing arguments against premium increases. Some eonomists have said more disclosure in the rate-setting process could help reduce health-care costs.

But health insurers have maintained that the information in such filings—such as pricing and marketing strategies—could be used by their competitors to their advantage.

Currently, New York regulators can seek to compel insurance companies to disclose their applications publicly, but the insurers can formally object and force the state into a lengthy appeals process. UnitedHealth had objected but relented recently for undisclosed reasons.

UnitedHealth’s move “sends an excellent message to the rest of the industry that this is the right thing to do,” Mr. Lawsky said. “I call on the rest of the industry to step up.”

A UnitedHealth spokesman, in a statement, said the company was pleased to settle its disagreement with the state. “We believe consumers need to understand the elements that are driving increased health care costs—and as a result, their premiums,” the spokesman said.

State regulators began asking for public disclosure of the rates in September. Ten insurers and an industry trade group responded with formal objections, which are permitted by law. On Oct. 19, the department issued a legal decision rejecting the insurers’ arguments for secrecy.

UnitedHealth agreed that its entire application, including all required information and exhibits, will be made available to the public, according to state officials. The rate-setting applications would be posted on the Department of Financial Services’s website. UnitedHealth doesn’t have a pending application to post yet, officials said.

In most states, rate-increase applications are only seen by regulators.

New York’s stature as one of the more robust state insurance watchdogs may prompt still more states to challenge companies for more disclosures.

The state’s push for disclosure applies to policies for individuals and small-businesses, and some health-maintenance organizations, covering about 2.5 million New Yorkers. UnitedHealth’s agreement would apply to policies covering about 600,000 people.