|
|
Press Release June 9, 1999 |
Contact: |
|
The Center for |
Consumers |
AUSTIN, TX - Consumer advocacy groups today called on Texas Insurance Commissioner José Montemayor to withdraw his approval of a 20% rate increase for health insurance sold through the Texas Health Insurance Risk Pool.
The Center for Economic Justice, Consumers Union, the Disability Policy Consortium, the Mental Health Association in Texas, the Center for Public Policy Priorities, the National Association of Social Workers/Texas, ADAPT of Texas, and Advocacy, Inc. filed the Motion for Rehearing, a copy of which is attached.
The Texas Legislature created the Texas Health Insurance Risk Pool to provide affordable health coverage for consumers who are unable to obtain health insurance because of their existing health problems. The Insurance Commissioner must approve any rate increases for the Pool. These consumers already pay 137.5% of the standard rates paid by other insurance consumers. The 20% increase will raise those rates even more, making health insurance unaffordable to many who are eligible for the Pool.
Although the Pool requested only a 10% rate increase, the Commissioner required the Pool to submit a higher rate increase proposal. Thus, the Pool requested the 20% increase, which the Commissioner approved in May. The consumer groups asked the Commissioner to withdraw his approval of the 20% increase. The Commissioner has until July 9 to rule on the request.
|
IN THE MATTER OF THE RATE FILING |
§ |
MOTION FOR REHEARING
TO COMMISSIONER MONTEMAYOR:
The Center For Economic Justice, Consumers Union, The Disability Policy Consortium, The Mental Health Association in Texas, the Center For Public Policy Priorities, the National Association of Social Workers/Texas, and Advocacy, Inc. request that you grant a rehearing of your Order No. 99-0763 and disapprove the 20% rate increase for the Texas Health Insurance Risk Pool.
1. Introduction
The Commissioner erred in requiring, through his approval process, that the Pool raise its rates by 20%. All insurer and consumer representatives on the Board of the Pool agreed to request approval of a 10% rate increase. Not one insurer or other person objected to the proposed 10% rate increase of the Pool. The Commissioner's attorney told the Commissioner that he could legally grant the 10% rate increase. Despite all of these facts, the Commissioner advised the Pool that he would not approve a 10% rate increase and advised the Pool Board to submit a higher rate increase proposal. When the Commissioner approved the consequently recommended rate increase of 20%, he failed to protect the most vulnerable insurance consumers from an uncalled-for and illegal premium increase. The Commissioner should withdraw his approval of the 20% rate increase.
2. Chronology of events
On January 22, 1999, the Board of the Pool unanimously approved a 10% rate increase, based on the actuarial opinion of the firm of Milliman & Robertson. M & R is a well-known actuarial firm that serves the insurance industry. On February 22, M&R, on behalf of the Pool, filed the 10% rate request with the Department. The actuary affirmed that the proposed rates complied with the statute.
The Commissioner refused to approve the February filing although the Pool's rates are already 137.5% of the standard rates, there was full support by the Pool Board for the 10% filing, and no person or insurer came forward to protest the 10% filing. Since the Commissioner must approve the Pool rates before the are used by the Pool, the Commissioner's request for a higher rate increase essentially forced the Pool Board to submit a rate beyond their best estimate of an appropriate rate increase.
The Commissioner erred in granting a 20% increase when the Pool only wanted a 10% increase.
3. Failure to grant a hearing
The Commissioner erred in failing to grant CEJ's request for a contested case hearing, the right to present evidence, and the right to cross-examine witnesses.
CEJ has the right to a contested case hearing. Article 3.77 § 9 (e) requires Commissioner approval of any rate increase. Because the approval involves "ratemaking" and "the legal rights, duties, or privileges" of the Pool and its insureds, the consideration of the rate filing constitutes a "contested case" under the Administrative Procedure Act. Texas Gov't Code Ann. § 2001.003 (1). Thus, CEJ and its affected members have all the rights provided for a contested case, including notice, cross examination, and an opportunity to present evidence.
Article 1.33B also grants CEJ the right to a hearing. Section (c)(1) expressly provides that:
Rate promulgation proceedings shall be governed by the provisions of this subsection and shall be treated as a contested case under the Administrative Procedure Act …
That section goes on to require a hearing. The legislative intent for a hearing in this case is further shown in Section (a), which states that the article does not apply to approval of individual company rates unless they are contested. Since Article 1.33B requires a hearing for contested rate filings, CEJ is entitled to a hearing.
Finally, the due process clauses of the Texas and U.S. Constitutions provide the right to a hearing, the right to present evidence, and the right to cross-examine witnesses before the Commissioner approves rates for the Pool.
4. Lack of substantial evidence
The Commissioner erred because there is insufficient evidence on which to base his approval of the 20% rate increase. The Milliman & Robertson actuary agreed that there is not sufficient data yet to set rates. She said that "we do not yet have a stable population on which to base cost estimates." (3/22 letter to Pool Executive Director Browning).
5. The failure to provide public notice of the Commissioner's action
The Commissioner erred by failing to provide public notice that he intended to consider and possibly approve the Pool's rate filing. The Commissioner failed to notice the contemplated action in the Texas Register or otherwise inform the public of his contemplated action.
6. Violation of the statute
The Commissioner's rate order does not comply with the requirements of Tex. Ins. Code art. 3.77(9)(d). The Commissioner erred in failing to leave the initial rates in place until sufficient data become available on which to base subsequent rates.
WHEREFORE, the groups below, on their own behalf and/or on behalf of their members who have or will obtain health insurance from the Pool, request that the Commissioner grant a rehearing and disapprove the Pool's request for a 20% rate increase.
|
Consumers Union |
Respectfully submitted, Attorney for The Center For Economic Justice Mental Health Association in Texas |
A copy of the foregoing was faxed on June 9, 1999, to Betty DeLargy, counsel for the Texas Health Insurance Risk Pool.
___________________
D.J. Powers
[ Health ] [ Finance ] [ Food ] [ Product ] [ Other ]
[ About CU ] [ News ] [ Tips ]
[ Home ]
Please contact us at: http://www.consumersunion.org/contact.htm
All information ©1998 Consumers Union