Remember earlier this year when Anthem Blue Cross Blue Shield filed for rate increases as high as 39% for California health insurance customers? Consumers were outraged. The state insurance commission reviewed the rate filings and found “flaws” and “miscalculations”. The insurer had little choice but to withdraw the increases, marking a major victory for policyholders.

That’s California, where state law authorizes this kind of investigation. In many states, insurance laws are far weaker. Insurance companies can raise rates if they wish, and the reasons why are kept secret from the public.

In May we started digging into rate filings at the Texas Department of Insurance and blogged about how BCBS of Texas filed for well over 100 different rate increases on their individual plans over just the last four years. Research at the department of insurance uncovered a history of rate hikes by insurers in Texas but many supporting documents were marked CONFIDENTIAL. Some insurance companies routinely allow the public to see everything, while others fight to keep everything except the rates themselves confidential.

BCBS of TX marked documents confidential for some rate increases, but left open other nearly identical files. That means we got a good idea exactly what these companies are trying to keep secret, and it is surprising. Among other things, they don’t want you to know their “target loss ratio” – the share of your premium dollar they intend to actually spend on medical care.

We asked the Attorney General’s office for an opinion on the insurer’s claim that these rate filings should be kept from public scrutiny. Just this week BCBS of Texas responded (PDF Download) with an argument against public disclosure stating that these filings hold “trade secrets” (like the formula for Coke or Google’s algorithm).

Here’s a sample (PDF Download) of the document they are trying to keep secret, from a similar rate increase filing not marked confidential. Several things stand out. The proposed loss ratio of 66.5% is quite low (soon, insurance companies will have to spend at least 80% of premiums on medical care). Administrative expenses are quite high. It seems, there is room here to negotiate something better for consumers—IF consumers knew what was going on.

Are these rate increases unjustified like in the case of Anthem Blue Cross Blue Shield in California? Some of the filings we’ve requested include increases of up to 30% for individual policies in Texas. That’s an awfully big increase to ask for if you are not willing to tell the public exactly why you need it. While we wait to hear back from the Texas Attorney General why don’t you help us highlight these insurance company abuses by sharing your story with us about health insurance rate hikes.

comments (2)

The Texas Health Insurance Risk Pool is a plan through BCBS of Texas for individuals that do not qualify for other insurance due to pre-existing conditions, but they are allowed by the State of Texas to charge over 200% the normal premium rate. My husband has been a "Pool" member for 10 years and his premiums increase every 6-12 months by $50 to $100 each time. He does not qualify for the "new coverage"plan because he has been covered for the last few years. What will the government programs do for those "stuck" with high insurance plans that are now in limbo waiting for affordable options with pre-existing conditions?

KLP - You pointed out one of the major limitations of this program, you have to have been uninsured. Therefore if you're enrolled in something like the Texas High Risk Pool, a state plan for people that can't get coverage because of pre-existing conditions, then you won't qualify for the new Pre-Existing Condition Insurance Plans.

Ultimately this program only helps a very targeted group of people and most people won't see the broad benefits of health reform until the exchanges and subsidies begin in January 2014.

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