Current through Register Vol. 48, No. 12, March 22, 2024
a) As required by
45
CFR 154.225(a), when the
Director receives a Rate Filing Justification for a rate increase subject to
review and the Director reviews the rate increase, the Director will make a
timely determination whether the rate increase is an unreasonable rate
increase, and submit that decision to CMMS.
b) If the Director determines that the rate
increase is unreasonable, CMMS will provide the Director's final determination
and brief explanation to the health insurance issuer within five business days
following CMMS receipt of the final determination.
c) The Director's rate review process
includes an examination of the following as required by
45 CFR
154.301(a)(3):
1) The reasonableness of the assumptions used
by the health insurance issuer to develop the proposed rate increase and the
validity of the historical data underlying the assumptions;
2) The health insurance issuer's data related
to past projections and actual experience;
3) The reasonableness of assumptions used by
the health insurance issuer to estimate the rate impact of the reinsurance and
risk adjustment programs under sections 1341 and 1343 of the Affordable Care
Act; and
4) The health insurance
issuer's data related to implementation and ongoing utilization of a
market-wide single risk pool, essential health benefits, actuarial values and
other market reform rules as required by the ACA.
d) As required by
45 CFR
154.301(a)(4), the
examination must take into consideration the following factors, to the extent
applicable to the filing under review:
1) The
impact of medical trend changes by major service categories;
2) The impact of utilization changes by major
service categories;
3) The impact
of cost-sharing changes by major service categories, including actuarial
values;
4) The impact of benefit
changes, including essential health benefits and non-essential health
benefits;
5) The impact of changes
in enrollee risk profile and pricing, including rating limitations for age and
tobacco use under PHS Act section 2701;
6) The impact of any overestimate or
underestimate of medical trends for prior year periods related to the rate
increase;
7) The impact of changes
in reserve needs;
8) The impact of
changes in administrative costs related to programs that improve health care
quality;
9) The impact of changes
in other administrative costs;
10)
The impact of changes in applicable taxes, licensing or regulatory
fees;
11) Medical loss
ratio;
12) The health insurance
issuer's capital and surplus;
13)
The impacts of geographic factors and variations;
14) The impact of changes within a single
risk pool to all products or plans within the risk pool; and
15) The impact of reinsurance and risk
adjustment payments and charges under sections 1341 and 1343 of the
ACA.