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.