The Center for Consumer Information & Insurance Oversight

Massachusetts Rate Review Grants Award List

Cycle I Grant Application Summary

Massachusetts Grantee: Massachusetts Department of Insurance

Award Date: August 16, 2010

Award Amount: $1,000,000

  • Expand the Scope of the Review Process: Currently, Massachusetts has prior approval authority over Blue Cross Blue Shield, HMOs and the small group market. The Commonwealth will expand filing requirements to the large group market.
  • Improve the Review Process: Massachusetts will improve health insurance premium filings and review protocols by developing new analytic tools to evaluate rates. The filing requirements will be further refined and carriers must separate claims and administrative data into standardized buckets and develop new models to analyze rate data.
  • Increase Transparency and Accessibility: At present, rate filings are available upon request after an internal review is completed. Massachusetts will modify its website to enhance product rate information displayed.
  • Develop and Upgrade Technology: Massachusetts will develop new tools to improve efficiency and streamline reporting.

Cycle II Grant Application Summary

Massachusetts Grantee: Massachusetts Department of Insurance

Award Date: September 20, 2011

Total Award: $3,385,165

Baseline Award: $3,000,000

Workload Award Amount: $385,165

  • Expand scope of rate review: Massachusetts will continue enforcing Chapter 288 of the Acts of 2010 (authorizing presumptive disapproval; if a filing is disapproved it is subject to a rate hearing). Massachusetts’s legal support will work on new regulatory tools and participate in hearings. The Department of Insurance will also commission actuarial studies of market conditions and structures to evaluate cost drivers.
  • Improve rate filing requirements: Contracted actuaries will develop new tools that require companies to separate claims trends and administrative costs into standardized buckets to track spending. Massachusetts will also evaluate the impact of new products on the availability and cost of health coverage.
  • Improve transparency and consumer interfaces: Massachusetts proposes consultant work to improve consumer information about options for health insurance. The Commonwealth will also enhance its website to provide more consumer friendly information on rate filings and the rate review process.
  • Hire new staff: Massachusetts will create 5 to 8 new positions from with the Cycle II grant funding.
  • Improve IT: Massachusetts will enhance and standardize methods to collect rate review information so the data can be aggregated and reviewed by actuarial staff.

Cycle III Grant Application Summary

Massachusetts Grantee: Massachusetts Department of Insurance

Award Date: September 23, 2013

Total Award: $3,394,884

Baseline Award: $2,000,000

Workload Award Amount: $994,884

Performance Amount: $400,000

  • Improve the quality and efficiency of rate review: Massachusetts will use Cycle III funds to expand the data and analytic tools available to actuaries in order to permit more thorough evaluation of rate filings. For example, Massachusetts proposes to expand the data collected on health insurance benefits in order to examine the alignment of rates with benefits.  
  • Proposed studies: Massachusetts plans to develop and commission studies to evaluate Massachusetts market conditions and other cost drivers impacting premiums.
  • Improve rate review transparency: Massachusetts plans to standardize the data received in rate filings, permitting the state to enhance its rate review website with standard information about rate filings.
  • Incorporate medical claims analysis into rate review:  In order to enhance the state’s analysis of rate filings, Massachusetts will analyze medical claims data collected by the state’s All Payer Claim Database. These analyses will permit the state to use medical trend data in their review of rate filings.
  • Enhance pricing transparency: Massachusetts will publish insurance company-specific cost and pricing information on the state’s website.

Cycle IV Grant Application Summary

Massachusetts Grantee: Commonwealth of Massachusetts Division of Insurance
Award Date: September 19, 2014
Total Award: $1,179,000

  • Expand Scope of Rate Review: Massachusetts plans to study underlying rate increases by conducting analyses on risk adjustment and reinsurance estimates, provider risk-sharing rearrangements, and cost pressures. 
  • Improve the Quality/Efficiency of Rate Review: Massachusetts will conduct follow-up examinations of insurance carriers operating in Massachusetts’ merged small group and individual market to confirm that rates generated in 2014 and 2015 were calculated consistent with state and federal rules, and were based on index rates and rating factors as identified in carriers’ ratings.
  • Data Dissemination and Transparency: Massachusetts plans to develop a website that will automatically update with rate filing information. The website will present information in a transparent, understandable manner for consumers, including a multi-lingual population.

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