FAQ’s Regarding Health Insurance Rate Oversight

What is rate oversight?

Rate oversight requires health plans to let the public and the Insurance Division know how they set premiums. The Division will review the premiums to make sure that they are adequate and not excessive or unfairly discriminatory.

How does rate oversight benefit consumers?

Rate oversight can result in the elimination of excessive insurer profits as well as the elimination of underpricing. This may encourage increased competition in the market. The Division’s review will make certain that the calculations are correct and include only necessary costs, which will enable consumers to make choices without fear that they are being gouged or that the insurer will leave the market or become insolvent.

Does rate oversight harm health plans or providers?

No. Well-managed plans with fair rates should not fear oversight. Providers will benefit because oversight will be used to make certain that premiums are used to pay for necessary health care expenses.

Will health plans or providers have additional costs as a result of rate oversight?

Providers should have no additional costs as a result of rate oversight. Health plans will be required to provide information to support their rate calculations, but this is information that they already have, because it was used to develop the rates that they charge their members. Rate oversight provides a double-check on the health plans’ premium calculations.