Benjamin M. Lawsky, Superintendent of the Department of Financial Services, announced today that the largest health insurer in New York, UnitedHealth Group, has agreed to end the secrecy over its request for increased insurance rates. After the Department recently notified health insurers that it planned to make the rate increase filings public, United, nine other insurers and an industry organization all filed formal legal objections. Today, in an agreement with the Department, United, which also does business in New York as Oxford, has formally withdrawn its objections and agreed with the Superintendent that its filings should be made public.

Superintendent Lawsky said, “It’s absolutely essential for the public to know the basis for proposed rate increases – these filings should not be treated like classified material that only a select few may know. Transparency here will allow the public to rigorously comment on proposed rates and will also help promote competition. I applaud UnitedHealth and its CEO Jeff Alter for stepping up and becoming the industry leader when it comes to transparency. The rest of the industry should now follow UnitedHealth’s lead and end their policy of secrecy once and for all.”

Under a law passed in 2010, insurers are now required to seek the prior approval of the Department of Financial Services for certain health insurance rate increases. The insurers support their rate requests with substantial detailed supporting data. Previously, those detailed filings were kept confidential.

In September, Superintendent Lawsky determined that the filings should be disclosed so that the public can provide meaningful comments as part of the ratemaking process. The Department sent a letter to all of the health insurers informing them of this decision. Ten insurers and the industry trade group, the New York Health Plan Association, responded with formal objections, which are permitted by law. On October 19, the Department issued a legal decision rejecting the insurers’ arguments for secrecy. The insurers now have the right to an administrative appeal of that decision and, if their appeal is rejected, the right to challenge the decision in court.

UnitedHealthcare has agreed that its entire application, including all required information and exhibits, will be made available to the public. UnitedHealth’s decision terminates its challenge to the Superintendent’s decision. UnitedHealth’s position that the rate filings should be made public also substantially bolsters the position of the Department with respect to the remaining industry insurers, who are each still considering whether to appeal the October 19 decision.

Rate applications contain all of the information needed to determine whether a premium increase is justified, including:

• A summary of the amount of money the insurer spent in the last two years on medical claims, which is used to project future claims expenses. Commonly referred to as “medical trend,” this information is the basis of the premiums paid by policyholders.
• The actuarial memorandum, which specifies all of the actuarial assumptions used in analyzing how much medical claims are going to be in the coming year.
• The amount of administrative expenses and profits.
• A list of all benefit changes, such as copayments or drug benefits, which have been made to the policy.
• Which policies are affected by the rate increases, which geographic regions will be getting increases and the number of policyholders affected.

UnitedHealth does business in New York under the names UnitedHealthcare and Oxford, including Oxford Health Plans (NY) Inc., Oxford Health Insurance Company, Inc., UnitedHealthcare Insurance Company of NY, UnitedHealthcare of NY - HMO, Health Net Insurance Co. of NY Inc., and Health Net of NY Inc.

The other insurers that objected to the Superintendent’s decision are Aetna Health, Capital District Physicians’ Health Plan, Connecticut General Life Insurance Company, EmblemHealth, Empire HealthChoice, Excellus Health Plan, HealthNow New York, (BlueCross BlueShield of Western New York and BlueShield of Northeastern New York), Independent Health, MVP Health Care and the New York Health Plan Association.

The 2010 prior approval law, which went into effect in 2011, was passed in response to the continuing rapid rise of health insurance premiums and in the hope that transparency and review would help slow that rise. To that end, the law mandates public comment. The Cuomo Administration’s position with respect to rate increase transparency is based on the need for the public’s comments on rate increases to be relevant and meaningful and thus informed by the detailed information in the rate increase filings.

Elisabeth Benjamin, Vice President of Health Initiatives at the Community Service Society of NY and a co-founder of Health Care for All New York, said, "United Health Plan's decision to release, in an agreement with Superintendent Lawsky, the information related to its proposed premium hikes is an important vindication for New York's health insurance consumers and small businesses. This announcement is a testament to the Cuomo administration's commitment to transparency and accountability in government.”