If you buy health insurance on the individual market, without help from an employer, you may want to know what New Mexico is doing to protect you from unfair and unnecessary premium rate increases. Here’s a summary of the New Mexico laws that govern rate increases.
- New Mexico has prior approval authority to approve or reject rate increases before they go into effect.
- Effective January 1, 2012, all individual market products must obtain prior approval from the Division of Insurance. Rate filings, financial statements, and information about a carrier’s reserves, surpluses and medical and administrative costs must be posted on the Division’s web site and the Division shall open a 30-day public comment period for each proposed increase. (SB 208, 2011).
- Proposed rates must be reasonable, not exessive, inadequate, or unfairly discriminatory and must be actuarially sound. The Superintendent of Insurance shall consider, at a minimum: (1) a company’s financial position, including surplus and reserves, for the carrier’s operations in the state; (2) whether the carrier has met the state’s medical loss ratio minimums; (3) changes to benefits or health plan design; (4) compliance with state or federal risk pooling and risk adjustment requirements; (5) reliability and accuracy of information provided. (SB 208, 2011).
- The Superintendent may hold a hearing on a proposed rate increase. A final order of the Superintendent on a proposed rate increase may be appealed to the state Public Regulation Commission. (SB 208, 2011).
- Prior to January 1, 2012, for commercial health insurers, the Superintendent can disapprove any policy form or rate, “if the benefits offered are unreasonably restricted in relation to the premium charged.” N.M. Stat. Ann. § 59A-18-14.
- Premium increases for commercial health insurance “shall not be effective without sixty days’ written notice to the policyholder.” N.M. Stat. Ann. § 59A-18-13.
- The Superintendent must review any form or rate filing for commercial health insurance within 60 days of the filing date. After the expiration of the 60-day review period, the Superintendent may disapprove a filing, or withdraw previous approval, after a hearing. N.M. Stat. Ann. § 59A-18-14.
- For nonprofit health plans, the Superintendent may disapprove rates if they are “excessive, inadequate or unfairly discriminatory, considering the healthcare expense payments to be made.” N.M. Stat. Ann. § 59A-47-26.
- The Superintendent must notify the nonprofit health plan of his approval or disapproval within 15 days, or within 30 days of the filing if he extends the time. If the Superintendent fails to act within this time period, the rates are deemed approved. N.M. Stat. Ann. § 59A-47-26.
- For HMOs, the Superintendent may disapprove an HMO rate, or methodology for determining rates, if it is “excessive, inadequate or unfairly discriminatory, considering the benefits to be provided.” N.M. Stat. Ann. § 59A-46-16.
- The HMO rate or methodology for determining rates is deemed approved if the Superintendent does not disapprove it within 30 days of the filing; however, the Superintendent can postpone taking action for an additional 30 days. N.M. Stat. Ann. § 59A-46-16.