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Two Utah health insurance companies have come under scrutiny for sharp price increases — one as high as 19 percent.
Trustmark Life Insurance Company wants to raise premiums by 18.9 percent for 2,956 of its Utah customers, all workers at small businesses; nearly $50 a month more on average, or $600 a year. United Healthcare is looking to slap a 14 percent rate hike on two of its small employer plans.
The price hikes are the first to be flagged by the Utah Department of Insurance since it began vetting increases of 10 percent or higher, a requirement of federal health reform.
The agency reviews all rate hikes, and last September began singling out double-digit increases for special scrutiny, publicizing them on a website and accepting consumer comment.
Consumers have until mid-April to give input on the Trustmark and United filings, said assistant insurance commissioner Tanji Northrup. An actuary will then review data supplied by insurers to determine whether they are justified, which usually takes about 60 days, said Northrup.
Publicizing steep hikes is something insurers have likened to public shaming, but the Obama administration pushed as a way to inform and empower consumers.
Only individual plans and small group policies — which together cover just under a third of all insured Utahns — are subject to review; large-employer plans are not.
States have broad discretion in determining whether increases are fair or exorbitant. How Utah treats the Trustmark and United filings could signal how heartily regulators embrace their new enforcement role.
Trustmark has been chided before. Last year, the Illinois-based insurer proposed rate hikes of 13 percent in five states that were deemed "unreasonable" by federal officials. The insurer was spending a low percentage of premium dollars on actual medical care and its projected costs were based on unreasonable assumptions, officials said.
Trustmark says bumping rates in Utah is "necessary to ensure the continued financial soundness" of the company, according to an explanation provided the state.
The company said it expects to pay 13 percent more in medical claims next year due to patients using more health care and provider networks charging more — but should still post a profit.
That contradicts federal data showing much slower growth in health spending as recession-weary Americans cut back on medical care. Also, Trustmark based spending projections on the behavior of clients outside Utah, which has the lowest per capita health spending in the country.
United Healthcare predicts losing money as claims grow about 12 percent; they rose 7 percent last year. The company did not give regulators a "plain language" explanation for the hikes, as required by law.
The company is still working on a response and insists regulators misunderstood its rate filing. "We don't expect rates to grow over the [10 percent] threshold," said a spokesman Will Shanley.
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Seeking relief from soaring health premiums?
You can file complaints with the Utah Department of Insurance at: http://www.insurance.utah.gov/
To comment on the United Healthcare and Trustmark Life health insurance hikes, visit: http://1.usa.gov/GIOpxx