The letter from CMS adds to the discussion on insurance premiums, which are at issue as payers request 2016 rate increases of 10 percent or more for plans under the Affordable Care Act.
Written by Kevin Counihan, the CEO of the Health Insurance Marketplace and director of the Center for Consumer Information & Insurance Oversight in CMS, the letter highlights the following five considerations for insurance commissioners.
1. Consumers who are now signing up for insurance plans under the ACA are healthier than those who signed up in the first enrollment period. Risk pools are also projected to be healthier, which means utilization rates will be down, compared to those of 2014 enrollees.
2. Medical cost trends stayed moderate through 2014 and early 2015. CMS expects cost trends to remain steady in 2016.
3. CMS announced it would pay 100 percent of eligible claim expenses for the 2014 reinsurance program.
4. Risk corridor payments and charges, which will be available August 14, should be taken into account before making final decisions on insurance rates.
5. Public hearings can be a helpful way to gauge rate requests.
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