The Center for Consumer Information & Insurance Oversight

Kentucky Rate Review Grants Award List

Cycle I Grant Application Summary

Kentucky Grantee: Kentucky Department of Insurance

Award Date: August 16, 2010

Award Amount: $1,000,000

  • Pursue Additional Legislative Authority: Kentucky will propose legislation to expand the health insurance premium review process to the large group market. In addition, actuarial consultants will evaluate whether revision or extension of laws are needed to enhance the review process.
  • Expand the Scope of the Review Process: Currently large groups (more than 50 members) are only required to file their health insurance premium methodologies with the State. Kentucky will increase the number of categories required to file and will expand its review of large group health insurance premium filings to include analysis of rate factors.
  • Improve the Review Process: Kentucky can currently collect and report on only a small portion of the health insurance premium filings. The State will increase the amount of data to be provided in filings and will modify the review process to include consideration of plan years, underwriting issues and policy forms.
  • Increase Transparency and Accessibility: Currently, information about health insurance premiums is not readily available to the public. Kentucky will develop a publication to explain the review process, including the information submitted by insurers and reviewed by the Department of Insurance. The Department will make information available to the public, in plain language, to give notice of specific health insurance premiums increases and decreases. In addition, the State will conduct surveys and hold open meetings for consumers in order to determine what information would be useful for them to make well-informed health insurance decisions.
  • Develop and Upgrade Technology: Kentucky will collect and analyze data to help with the rate review process.

Cycle II Grant Application Summary

Kentucky Grantee: Kentucky Department of Insurance

Award Date: September 20, 2011

Total Award: $3,225,170

Baseline Award: $3,000,000

Workload Award Amount: $225,170

  • Introduce legislation: Kentucky will amend 806 KAR 17:150 ,and any related statute, to increase the scope of data collected in the large group market and additional data, such as claims data, in other markets.
  • Expand scope of rate review: Kentucky will amend State regulations to collect more information from large group insurers and will make filing requirements applicable to non-major medical benefit plans such as student health plans.
  • Improve rate filing requirements: Kentucky will implement regulatory changes to require insurers to justify how they select and modify claims data, and allow the Department of Insurance to request additional data used to make trend predictions. Kentucky is also considering requiring insurers to report and justify administrative expenses in a more detailed manner.
  • Improve transparency and consumer interfaces: Kentucky proposes to establish on its website a mechanism to allow consumers to request an email whenever a filing is received by the Department. The State will also enhance its website further to allow consumers access to rate filings without going through the open records process. The State continues to assess how to best educate the public on the rate review process.
  • Hire new staff: Kentucky will create 1 new position with Cycle II grant funding; this position is in addition to the 6 positions created with Cycle I resources.
  • Improve IT: Kentucky will enhance its IT systems to automate analysis of rate increases, and will enhance its internal database to house all rate filings electronically, including consumer comments.

Cycle III Grant Application Summary

Kentucky Grantee: Kentucky Department of Insurance

Award Date: September 23, 2013

Total Award: $2,573,574

Baseline Award: $2,000,000

Workload Award Amount: $573,574

  • Improve the quality and efficiency of rate review: Kentucky will require issuers to submit additional documentation in order to permit a more comprehensive analysis of rate filings. Specifically, Kentucky plans to require additional detail regarding pricing trend assumptions. In addition, Kentucky has proposed to require additional information regarding issuer solvency in order to more thoroughly evaluate rate filings in light of the issuer’s overall financial position.
  • Improve rate review transparency: Kentucky proposes to enhance transparency by posting plain language information about rate filings on the state’s website.  Kentucky also plans to establish a public hearing process for proposed rate increases. In addition, Kentucky will notify consumers of proposed rate increases.
  • Health pricing transparency activities integrated into rate review:  Actuaries will integrate pricing, premium, and benefit information in order to better evaluate requested rates. In addition, Kentucky intends to analyze and publish pricing data in coordination with premium and rate filing information in order to provide online access to health pricing information.

Cycle IV Grant Application Summary

Kentucky Grantee: Kentucky Department of Insurance
Award Date: September 19, 2014
Total Award: $1,178,778

  • Improve the Quality/Efficiency of Rate Review: Kentucky will use funds to explore requiring issuers to report and justify administrative expenses in a more detailed manner. In particular, Kentucky will explore requiring issuers to provide an explanation regarding how the expenses appear in rate calculations, a breakdown of broad categories of administrative expenses, and a report of at least three years of actual expenses, by category.  This would enable reviewers to determine how expenses increase and how insurers are spending their money, and to make comparisons with other insurers in the market.
  • Improve Rate Review Transparency/Enhance Consumer Outreach: Kentucky intends to enhance transparency  and consumer outreach in a number of ways by:
    o Posting information to its website about rate filings and the issuer’s justification for increases in clear language
    o Implementing a public hearings process for proposed rate increases
    o Providing consumers with advance notice of rate increases before rate changes become effective
    o Establishing a website mechanism that will provide consumers with the ability to request an email whenever a health insurance rate filing is received
  • Enhance IT Infrastructure and Data Security: Kentucky plans to make information system enhancements to automate the analysis of health insurance rate increases.  Enhancements will include additional data collection, automation of the actuary’s rate filing analysis, and enhancements to accurately record filing dispositions.

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