Director's Message Regarding Health Insurance Premiums for 2017

As has been reported on our website and on healthcare.gov, Arizona’s rates for Obamacare-compliant health insurance for plan year 2017 are increasing significantly.  First, I want to say that I am sorry that your rates have increased so substantially.  While the Department’s role in rate review is limited, I want to acknowledge your frustration with the rising health insurance costs.  It is a difficult time for the Arizona health insurance market and the 2017 plan year will be extremely challenging.

As you are likely aware from the extensive media coverage, almost all of the insurers participating on the Arizona healthcare exchange, commonly known as the Obamacare marketplace, withdrew from the exchange or discontinued their exchange plans for next year. Neither the state nor the federal government have the authority to compel a company to sell insurance on the exchange.  As explained to the Department, the withdrawals were due to insurance companies suffering large financial losses from their participation on the exchange.  As a result, Arizona was left with only one insurance company per county that will be issuing policies that are eligible for premium subsidies on the exchange in 2017.  This means that one insurer will be absorbing all of the major medical insurance risk on exchange in each county.  Unfortunately for us, this substantial assumption of risk led to the filing of significant premium rate increases to cover that financial risk.

When a rate increase is filed with the Department of Insurance, the ADOI does not have legal authority to approve or disapprove the major medical insurance rate.  The Department’s responsibility is to review the rate filing to confirm that valid, detailed financial and actuarial information (as required by federal and state law) is provided in support of the rate increase.  In order to perform that review, the ADOI engages independent actuaries to scrutinize the rate filings in depth to confirm compliance with the laws and regulations.

Despite the magnitude of the premium increases, the independent actuaries’ detailed reviews found that the insurers had provided the required financial and actuarial information in support of the rate increases.  The ADOI carefully supervised and reviewed the actuarial work performed, and determined that the premium rate increases were in compliance with Arizona law.  Therefore, the ADOI “filed” the rates for use in Arizona.

Insurers are required to provide a written description justifying the rate increase (an actuarial memorandum) and a simple and brief narrative describing the data and assumptions that the insurer used to develop its rate increase (a consumer justification).  This information is available for your viewing at https://ratereview.healthcare.gov/

Lastly, while many individuals who purchase their coverage on the exchange receive subsidies that will cover most or all of the premium increase, roughly a quarter of those enrolled in Marketplace plans are ineligible for subsidies and will be faced with the difficult choice of paying a dramatically higher price or going without insurance and facing a stiff penalty from the federal government.  The Governor’s Office has expressed its concerns to Congress about this situation (http://www.mccain.senate.gov/public/_cache/files/556409f1-2002-4ec5-9301-54c8438df9e5/corieri-testimony-senate-homeland-security-9-15-16.pdf) and encourages you to contact your federal representatives as well with your concerns (https://www.usa.gov/elected-officials).

Priority: 
Leslie R. Hess
Extension of Major Medical Transitional Policies through Calendar Year 2018

Phoenix - The Arizona Department of Insurance (ADOI) announced today that insurers in the individual and small group[1] major medical health insurance markets can choose to renew transitional policies for a policy year beginning on or before October 1, 2018, provided all transitional coverage ends by December 31, 2018.    Transitional policies are non-Affordable-Care-Act-compliant policies that have been continuously in effect since by or before December 31, 2013.  At least 6 health insurers have individual or small group transitional policies still in effect in Arizona.

This extension is the maximum extension permitted under the Insurance Standards Bulletin issued on February 23, 2017 by the Center for Consumer Information and Insurance Oversight (CCIIO), and gives insurers the option to continue the pre-2014 individual and small group policies covering approximately 70,000 Arizonans through the end of 2018.  Insurers that offer this extension of transitional coverage are required to send each policyholder a renewal notice that explains the offer to continue the transitional policy through the end of 2018 and includes information regarding any related price increase.  Insurers must also send a 90-day notice for the final discontinuation of the transitional plans.

The extension does not affect grandfathered policies issued prior to March 23, 2010.  These policies can remain in effect as long as they maintain grandfathered status.

For additional information on the Affordable Care Act, please visit the Arizona Department of Insurance website or call Consumer Assistance at (602) 364-2499. 

 

[1] Small Group refers to a policy issued to an employer who employs at least two but not more than fifty eligible employees

(ARS § 20-2301(A)(21)).

 

Insurance Professional License Number Crosswalk (MS EXCEL)

With the Department of Insurance move off of its old regulatory system to State Based Systems ("SBS"), the license number for each Arizona-licensed insurance professional (insurance producer/agent, surplus lines broker, insurance adjuster, etc.) changed. Attached is a MICROSOFT EXCEL file that contains the name, old (legacy) license number, new license number and National Producer Number for each insurance professional licensed whose license expired/expires on or after 4/30/2016. Use the LICENSE SEARCH menu option at the top of this page to view the license record for a particular licensee or company.

Insurance Professional License Number Crosswalk (CSV)

With the Department of Insurance move off of its old regulatory system to State Based Systems ("SBS"), the license number for each Arizona-licensed insurance professional (insurance producer/agent, surplus lines broker, insurance adjuster, etc.) changed. Attached is a COMMA-SEPARATED VALUES (CSV) file that contains the name, old (legacy) license number, new license number and National Producer Number for each insurance professional licensed whose license expired/expires on or after 4/30/2016. Use the LICENSE SEARCH menu option at the top of this page to view the license record for a particular licensee or company.

Long-term Care Insurance: Notice of Publication of Final Rulemaking

On May 12, 2017, the Arizona Secretary of State published the Department's Final Exempt Rulemaking in the Arizona Administrative Register (23 A.A.R. 1120, May 12, 2017).

Suspect Arrested in $52,000 Auto Glass Scam

Phoenix, AZ – On Tuesday, June 13, 2017, the Arizona Department of Insurance (ADOI) Fraud Division arrested Mr. Marcel Deweaver on allegations of fraud schemes, theft, insurance fraud and identity theft.
Between August 2015 and June 2017, Mr. Deweaver allegedly filed over 120 fraudulent claims with multiple insurers. After obtaining vehicles through various auto dealerships, Deweaver allegedly had the vehicles covered under fraudulent insurance policies that he obtained under stolen identities, and paid premiums with fraudulent debit and credit cards; then would intentionally damage the safety glass of the vehicle and file a claim. Deweaver allegedly shopped around to different independent glass installation shops for ones that offered the highest incentives, up to $150 per claim, to fix the damages. The total loss to the insurance companies is believed to exceed $52,000 in fraudulent claims.
Deweaver was arrested Tuesday afternoon after the Arizona Department of Insurance Fraud Division developed information that Deweaver was in a 2012 Ford Explorer that he fraudulently obtained from a local dealership. The vehicle came to the attention of the ADOI Fraud Division after seven separate insurance claims had been filed within a month. After locating the vehicle in an apartment complex, ADOI agents requested assistance from the Arizona Department of Public Safety (DPS) once they realized Deweaver was in the vehicle and it exited the parking lot. In an odd turn of events, after believing that he was being followed, Deweaver pulled off onto the shoulder of the interstate seeking assistance from a DPS officer involved in a traffic stop, at which point ADOI agents took him into custody.
Marcel Deweaver was booked at the Maricopa County Jail and is being held on charges of fraud schemes, theft, insurance fraud and identity theft. The ADOI Fraud Division would like to thank National Insurance Crime Bureau for their assistance with the investigation, and the Arizona Department of Public Safety for their assistance in making the arrest.

2017-2018 Insurer Annual Assessments

This document contains all 2017-2018 assessments effective July 1, 2017, that will be mailed to insurers on Monday, July 3, 2017.  Please either use the insurer's page from this document or the notice we mail, and EITHER: Remit payment using the NAIC OPTins system (OPTins.org); or, if you are unable to use the OPTins system, send payment with a copy of the insurer's assessment notice.

Assessments are due July 31, 2017.