Under the ACA, exchange
administrators are required to consider rate increases when making
certification decisions. Previously, CMS flagged so-called “outlier” rates,
which were substantially higher than others, and then asked that state’s
department of insurance to provide a rationale for approving the increase. The
agency often deferred to states in allowing substantial rate increases. When
carriers submit initial 2017 rates this year, however, CMS proposes conducting
a rate review of QHP increases over 10% according to the letter.
State regulators and
carriers could push back on the proposal. A spokesperson for the National
Association of Insurance Commissioners declined to comment until after it
submits comments to CMS. CMS is the sole rate reviewer in five states —
Alabama, Missouri, Oklahoma, Texas and Wyoming —which opposed the ACA and
didn’t want to play a role in approving QHP rates. Regulators in those five
states actively review proposed rates only for products outside of the
exchanges. CMS could potentially use the same rate-review process for other FFE
states if the proposal is finalized.
For the 2017 plan year,
carriers must submit their applications and rate filings between April 11 and
May 11. Final submission of all QHP data and permitted changes are due to CMS
on Aug. 23.
CMS also appears to be
moving to more of a parallel regulatory structure with state insurance
departments when it comes to the oversight of agents and brokers, based on the
letter and the BPP.
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