Missouri recently enacted the Missouri Health Insurance Rate Transparency Act, which gives the state’s insurance regulator the job of reviewing proposed health insurance rates before consumers get the bill. This process, known as “rate review,” is a key consumer protection required by the Affordable Care Act. This law is an important step in the right direction. Up until now, the Missouri Department of Insurance lacked the authority to collect and review rate filings for health insurance products; the federal government has had to fill the gap. This ends next year, leaving only Oklahoma, Texas, and Wyoming reliant on federal authorities to protect their citizens from unfair health insurance pricing.
Gathering specific data from insurers explaining all the assumptions they rely upon in coming up with their rate increase requests can expose mistaken assumptions and errors, such as double counting. Receiving and reviewing that information can give regulators a basis for pressing insurers to lower their rate requests and is crucial to ensuring consumers do not get taken advantage of by insurers. We, therefore, applaud the Missouri legislature and the Governor for bringing this critical duty into their own state and salute the director of the Missouri Department of Insurance for his commitment to protecting consumers.
Missouri, like other states with rate review authority, is now at the starting gate of safeguarding the public interest. The Missouri Department of Insurance, and regulators in other states armed with this authority, now must exercise that authority by rigorously reviewing rate filings and aggressively negotiating with carriers that propose unfair and outsized rate increases. By doing so in California, that state’s regulators have saved consumers over $400 million since 2011 through negotiation, even though they do not have authority to outright reject a rate increase proposal. The new law in Missouri also requires its Department of Insurance to establish a process for consumers to comment before the Department’s review of rates is finalized, and to have those comments publicly viewable. Engaging consumers in the rate review process is a challenge that has been approached in a number of ways around the country, with varying success. We urge the Missouri Department of Insurance to seek ways to engage the public in the process, whether through direct engagement or in partnership with consumer organizations already active in consumer outreach.
Missouri is the ‘Show Me State,’ after all. And Missourians now will expect insurers to prove out every penny of health insurance rate hikes!