If you buy health insurance on the individual market, without help from an employer, you may want to know what Kentucky is doing to protect you from unfair and unnecessary premium rate increases. Here’s a summary of the Kentucky laws that govern rate increases.
- Kentucky has different requirements for health insurance policies and “health benefit plans,” which consist of a benefit package defined in state statutes. Filings are submitted to the Kentucky Department of Insurance and the Attorney General.
- Rate increases applying to health insurance policies require prior approval before they go into effect. After a rate increase is filed, the Insurance Commissioner has authority to hold a hearing within 30 days, and then issue an order approving or denying the increase. The Attorney General may participate in hearings.
- For approval or denial, the Commissioner considers (1) whether benefits are reasonable in relation to premiums; (2) previous premium rates for policies; and (3) the effect on policyholders.
- Approval may be withdrawn if the Commissioner later determines that benefits are no longer reasonable in relation to premiums. KY REV. STAT. 304.17-380.
- For “health benefit plans” there is a a “file and use” process, in which the insurer can put new rates into effect before getting approval but the Commissioner may review disapprove them even after they are in effect. Rates must be filed on or before the date they go into effect. The Commissioner has 60 days to review rates; rates are deemed approved if not disapproved by the end of the 60-day period.
- The Commissioner will approve or disapprove health benefit plan rates based on similar factors as those considered for health insurance policies. The Commissioner may require a reduction if rates are unreasonable.
- Insurers can bypass this review process if they file a “medical loss ratio” guarantee with their health benefit plan policy, meaning a guarantee that they will meet state standards for spending a minimum percentage of premiums on healthcare benefits (65% under current Kentucky law). Rates with the guarantee will be deemed approved upon filing. KY REV. STAT. 304.17A-095.
- Kentucky does not post rate increaes or rate filings online. Rate filings are available through a public records request. For more information, see Kentucky’s Health Reform Rate Review Grant Application.
Information is based on review of state statutes and regulations and, in some cases, interviews or emails with state insurance departments.