The Rate Review Process: Here's How it Works

Step One: Who Must Go Through the Rate Review Process?

• The MID staff and an independent actuary review all filings to determine whether the rates are reasonable and to ensure compliance with applicable State and federal laws. The insurer is required to give the insured at least 60 days notice before any new rates are implemented.
• In an effort to be more efficient and make the rate making process more transparent, the MID recommends that all companies utilize the electronic web based rate filing procedure. This state of the art process allows all interested parties access and the capability to review and monitor the process. However, some carriers still follow the traditional paper process.
• Pursuant to certain federal and State laws, MID does not have jurisdiction over all of the health insurance industry. This process does not apply to self-funded plans, ERISA plans, union negotiated plans, State employee plans, and federal employee plans.

Step Two: Insurers Submit the Requisite Documents in the Prescribed Format for the Online Process

• All insurers are required to certify that filings are complete and fully compliant with all applicable State and federal requirements. If the insurer's filing is not complete, then that insurer will be notified and MID will suspend any action on the filing until all requirements are met.
• MID requires that all rate increase requests include an opinion from the insurer justifying and explaining why the rate increase should be allowed. In addition to the company's actuary, the MID has its own internal staff and an independent actuary review every rate increase request to ensure that the rates are justified and comply with State and federal requirements.

Step Three: An Actuary Will Then Review the Request and Determine if it is Reasonable

• The MID team, including the independent outside actuary, considers many factors when reviewing rates including, but not limited to the following: recent history of rate filings (both increases and decreases); trends in health care costs; changes in benefits; administrative costs of the company; and losses and profits of the insurer. Each type of product must charge a premium to allow it to support its own losses. For example, the losses of an insurer's small group plan cannot be offset by profits made in the individual market business. Therefore, the insurer must charge a premium for the small group plan that will support the losses it realizes from that specific market.
• The independent outside actuary performs a detailed analysis of the rate filing to determine if the request is reasonable and complies with federal and State requirements. The MID staff and the independent actuary perform their own analysis based on data obtained through the financial records of company.
• After performing the review and analysis, the MID actuary makes a written recommendation on what action to take on the rate filing. This review normally takes 30-45 days, but may take longer depending on the type of filing and responsiveness of the company.
• In evaluating a rate increase, the MID must determine the following: 1) whether the rate is reasonable; 2) whether the rate is excessive, unjustified, or unfairly discriminatory; and 3) if the rate complies with all applicable federal and State requirements. The MID relies on the requirements set forth in Mississippi Insurance Department Bulletin 94-1, Bulletin 2011-7, MID Regulation 73-4, and the Affordable Care Act to make these determinations. These requirements can be found on the MID's web site and more information on the federal requirements can be found on healthcare.gov.
• After being reviewed by the MID staff and the actuary, all rate increase requests are sent to the Commissioner of Insurance for his review and final action. The Commissioner can accept the recommendation of the actuary and MID staff, request more information, or suggest a different rate. He can also deny the request.

Step Four: The Request Could be Approved, Denied, Approved at a Reduced Rate, or More Information Could be Requested

Step Five: Information on the Rate Change Request is Published on the MID Rate Review Website

• If the rate increase is not approved as requested, then the insurer has the right to petition the Commissioner of Insurance for a hearing.
• Upon filing of the rate increase, the information is posted on the MID's website to allow all interested parties an opportunity to comment. Once final action is taken by MID, the final decision will be posted on MID's website and the insurer will be notified as well.
• The MID rate review website provides the company and the general public the ability to monitor the status of any rate filing.
  It also allows the consumer the ability to review all prior rate increases of any insurer they are considering purchasing health insurance from.
• The MID staff will update the website on the status of rate filings so that the company and the general public will be able to easily determine the progress of a rate filing.