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.

Notification of Close of Record

Notification of Close of Record on Holding Company rulemaking

Bureau of Justice Assistance Offers Resource on Damaged Vehicles

Washington - The Office of Justice Programs' (OJP) Bureau of Justice Assitsance (BJA) recommended today that in light of the anticipated high volume of flood-damaged automobiles in the aftermath of hurricanes Harvey and Irma, consumers educate themselves about a vhicle's history before making any purchase decisions.  Overseen by BJA, the National Motor Vehicle Title Information System (NMVTIS) is designed to prevent concealment of flood damage and other vehicle histories. After past hurricane events, authorities reported truckloads of flooded vehicles being taken out of the impact zone where they were dried out, cleaned and readied for sale to unsuspecting consumers in states that do not brand flood vehicles. It is currently estimated that due to Hurricane Harvey and Hurricane Irma, as many as 1 million flood-damaged automobiles could potentially be passed on to unsuspecting buyers in the coming weeks and months.

The floods caused by or associated with these hurricanes have resulted in severe water damage to thousands of vehicles that can make electrical systems and airbag sensors prone to failure. Prior to purchasing a vehicle, NMVTIS allows consumers to find information on the vehicle's title, most  recent odometer reading and brand history. A “brand” is a descriptive label that states assign to a vehicle to identify the vehicle's current or prior condition, such as “junk,” “salvage” or “flood” designation. By capturing into one system specific information from multiple entities such as state motor vehicle departments, insurance carriers, salvage auto auctions, automobile recyclers, and junk and salvage yards, NMVTIS offers states and consumers protection from title fraud and potentially unsafe vehicles.

“BJA remains committed to ensuring the consumer protection benefits provided by NMVTIS,” said Acting BJA Director Tracey Trautman. “We encourage prospective purchasers to consider obtaining a NMVTIS vehicle history report and have the vehicle checked by a trusted mechanic as part of making an informed used car-buying decision.” The list of approved NMVTIS vehicle history report providers can be found on the official NMVTIS website at: https://www.vehiclehistory.gov/nmvtis_vehiclehistory.html

The Office of Justice Programs, headed by Acting Assistant Attorney General Alan R. Hanson, provides federal leadership in developing the nation’s capacity to prevent and control  crime, administer justice and assist victims. OJP has six bureaus and offices: the Bureau of  Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office  of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of  Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about  OJP and its components can be found at:  www.ojp.gov.