I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
In light of public outrage over a controversial 21 percent rate hike on 40,000 New Mexicans by Blue Cross and Blue Shield of New Mexico — and revelations the increase may have been based partly on exaggerated losses — the New Mexico Division of Insurance is moving require insurers to submit more information, including rate histories, when filing new rates, according to Division records.
State governments across the U.S. are struggling to control health insurance rates in the midst of a recession that has left increasing numbers of Americans unable to pay climbing monthly premiums. The Obama administration is offering states help in beefing up oversight and the division has applied for a $1 million federal grant to overhaul its regulation of health insurance rates.
Regulators will look more closely at documents before approving rate increases
In the future, regulators will ask companies to provide more information before they can raise rates, acting Insurance Superintendent Johnny Montoya confirmed.
In the past, insurers were not required to provide financial data like rate histories to regulators. Now, insurers will have to provide detailed rate data and projected expenses and losses with and without the proposed rate hike, in an Excel spreadsheet, according to a recently-amended version of the Division’s insurance rate review checklist obtained by The Independent.
Blue Cross Blue Shield’s failure to provide such historical data was one issue raised by an independent insurance rate expert hired by the Attorney General’s office, Allan Schwartz, who concluded the rate hike was unjustified.
Traditionally, insurers in New Mexico have filed rate increase notifications with the Division without submitting documentation of their claimed losses or expenses, other than a letter signed by an independent actuary attesting that the documentation exists.
New bureau would review individual plans
The division also plans more extensive reforms, according to its federal grant application, including the creation of a Consumer and Business Services Bureau to review individual and small group health insurance rates.
The division wants to make all insurance rate filings public on its website, and it will seek legislation empowering regulators to consider surplus and investment income, cost containment efforts, and the insurer’s overall profitability, rather than merely the profitability of a particular insurance policy line, according to the application.
“In recent years, double-digit rate increases have state policymakers and insurance regulators concerned and the (PRC has) moved to increase public access to rate filings and to arm regulators with additional tools to curb rate increases,” the grant application states.
The new bureau would include four new staff employees and a budget for external rate reviews by independent experts, according to the grant application.
“This will add an additional professional review rather than relying (on) one internal opinion before the decision is rendered,” the grant application states. The Division will also modify its online rate filing system to identify filings that may be deemed “unreasonable,” the application states.
The Division also plans to require insurers to separately report and justify administrative expenses such as salaries, commissions, advertising and marketing, the application states.
Blue Cross Blue Shield NM’s parent company, Illinois-based Health Care Services Corporation (HSCS), has accumulated $6.7 billion in surpluses.
Acting state insurance superintendent Johnny Montoya suspended Division approval of the rate hike in June and ordered a re-review of Blue Cross Blue Shield’s filing, and a public hearing scheduled for Aug. 25.
The state Supreme Court denied the insurer’s petition to reverse Montoya’s order, last month.
