February 22, 2011
Center for Consumer Information and Insurance Oversight
Department of Health and Human Services
ATTN: OCIIO-9999-P
Room 445-G, Hubert H. Humphrey Building
200 Independence Avenue SW
Washington, DC 20201
RE: Rate Increase Disclosure and Review Notice of Proposed Rulemaking
Dear Secretary Sebelius,
On behalf of the National Partnership for Women & Families, I commend you for the
open, fair, and expeditious process you and the Center (formerly Office) for Consumer
Information and Insurance Oversight (CCIIO) have used in the past 11 months to
implement the early insurance market reforms included in the Affordable Care Act
(ACA). We have already begun to see the profound positive impact these reforms can
have on the lives of women and families across the nation. Today, women can get
critical screenings, like mammograms and Pap tests, without cost-sharing and have
direct access to Ob-Gyns. Children with pre-existing conditions cannot be denied
coverage and young adults can stay on their parents’ plan as they navigate the often
bumpy road finishing school and beginning their careers. And everyone can feel
confident that they are getting value for their premium dollars because of the medical
loss ratio requirements.
We do have some concerns, however, with the notice of proposed rulemaking regarding
requirements for rate increase disclosure and review (referred to commonly as rate
review). We have focused our comments on an issue of particular concern - the use of
state definitions of market size rather than the definitions provided by the ACA.
Definitions of Market Size
The ACA requires that states (or if the state process is deemed ineffective, the federal
government) review unreasonable rate increases and insurers’ justification for such
increases to health insurance products sold in the individual and small group markets.
If a state finds a rate increase to be unreasonable despite the insurers’ justification, they
will publicly post this determination and recommend that the insurer withdraw its
proposed increase and propose a lower rate. Some states also have the authority to
deny unreasonable rate increases – and we hope more will adopt this authority in the
future.
1875 connecticut avenue, nw ~ suite 650 ~ washington, dc 20009 ~ phone: 202.986.2600 ~ fax: 202.986.2539
email: [email protected] ~ web: www.nationalpartnership.org
Under the proposed rule, however, rate increases for large employer plans are not
subject to review. It is understood that purchasers in the large group market have a
much greater degree of leverage in negotiating rates than smaller employers and
individuals do and are therefore less likely to see excessive or unfair rate increases.
This is a reasonable approach for employers with 101 or more employees, as the ACA
defines large groups. However, rather than using this definition, the proposed rule
defers to state definitions of group size – which in some cases define large employers
as small as having 50, or even 25, employees.
It is unrealistic to expect such small employers to have the same bargaining power as
large employers to negotiate fair rates. We are very concerned that the many women
who work for small businesses with between 25 and 100 employees may suffer from
unfair, discriminatory rate hikes due to this gaping loophole. Furthermore, given that
women are more likely to own smaller rather than larger firms, women business owners
could also suffer disproportionately. We strongly urge that this provision be revised to
apply the ACA group size definitions when a final rule is released and ensure that the
protections afforded by this provision apply evenly across small businesses.
We greatly appreciate this opportunity to weigh in on the proposed rule and look forward
to working with you going forward on future implementation activities. If you have any
questions about our comments, please contact Christine Monahan at (202) 986-2600 or
[email protected].
Sincerely,
Debra L. Ness
President