(a) Upon receipt of a rate filing under this subchapter,
TDI will evaluate whether the issuer has provided sufficient data
and documentation for TDI to make the determinations specified in
this section. If the level of detail provided by the issuer under §3.505
of this title (relating to Required Rate Filings) does not provide
a sufficient basis for TDI to make a determination, TDI will request
additional information as necessary. The issuer must provide the requested
information within 10 business days of the request. If the issuer
fails to provide the requested information or establish a plan that
is acceptable to TDI to provide the information, TDI will deem the
filing withdrawn and notify the issuer of the withdrawal.
(b) In reviewing rates filed under this subchapter,
TDI will examine:
(1) the reasonableness of the assumptions used by the
issuer to develop the rates and the validity of the historical data
underlying the assumptions;
(2) the issuer's data related to past projections and
actual experience;
(3) the reasonableness of assumptions used by the issuer
to estimate the rate impact of the reinsurance and risk adjustment
programs under 42 USC §18061, concerning Transitional Reinsurance
Program for Individual Market in Each State, and 42 USC §18063,
concerning Risk Adjustment; and
(4) the issuer's data related to implementation and
ongoing utilization of a market-wide single risk pool, essential health
benefits, actuarial values, and other market reform rules as required
by 42 USC Subchapter XXV, Part A, concerning Individual and Group
Market Reforms.
(c) In reviewing rates filed under this subchapter,
TDI will consider the following factors to the extent applicable to
the filing under review:
(1) the factors specified in Insurance Code §1698.052(b)
and (d), concerning Additional Rules and Guidance Related to Individual
Health Plan Rates;
(2) the factors listed in 45 CFR §154.301(a)(4),
concerning CMS's Determinations of Effective Rate Review Programs;
and
(3) whether the issuer complies with the rating standards
provided under §3.503 of this title (relating to Rating Standards).
(d) In reviewing rates for a qualified health plan,
TDI will also consider the factors specified in Insurance Code §1698.052(c).
(e) A rate increase is unreasonable if, based on the
criteria identified in this subsection, the rate is excessive, unjustified,
or unfairly discriminatory.
(1) A rate increase is excessive if it causes the premium
charged for the health insurance coverage to be unreasonably high
in relation to the benefits provided under the coverage. In determining
whether the rate increase causes the premium charged to be unreasonably
high in relationship to the benefits provided, TDI will consider:
(A) whether the rate increase results in a projected
medical loss ratio below the federal medical loss ratio standard in
the applicable market to which the rate increase applies, after accounting
for any adjustments allowable under federal law;
(B) whether one or more of the assumptions on which
the rate increase is based is not supported by substantial evidence;
and
(C) whether the choice of assumptions or combination
of assumptions on which the rate increase is based is unreasonable.
(2) A rate increase is unjustified if the issuer provides
data or documentation that is incomplete, inadequate, or otherwise
does not provide a basis upon which the reasonableness of an increase
may be determined.
(3) A rate increase is unfairly discriminatory as described
by Insurance Code §560.002(c), concerning Use of Certain Rates
Prohibited; Rate Requirements.
(f) A rate will be deemed compliant at the expiration
of 60 days from the filing of the rate, unless the filing is withdrawn
or TDI has determined that the rate is noncompliant or granted an
extension as described below. If TDI has not finalized a determination
before the 60th day, TDI may extend the 60-day period by not more
than 10 days if TDI provides notice of the extension to the issuer.
Notwithstanding anything else in this subsection, the issuer may extend
the time frame for TDI's review or waive the right to deem the rate
compliant.
(g) If a rate filing fails to comply with the rating
standards provided under §3.503 of this title, TDI will identify
the deficiency and ask for corrections. If within 10 business days
the issuer fails to either make the necessary corrections or establish
a plan that is acceptable to TDI to address the identified deficiencies,
TDI will deem the filing to be noncompliant and notify the issuer
of the determination.
(h) Before making a determination that a rate increase
is unreasonable, TDI will communicate its objections to the issuer
and provide an opportunity for the issuer to provide additional information
or to make modifications. If TDI determines that a rate increase is
unreasonable but that the issuer is legally permitted to implement
the rate increase, TDI will issue a final determination and a brief
explanation. After receiving a final determination that a rate increase
is unreasonable, the issuer must submit a final justification for
the rate increase and prominently post information concerning the
rate increase, consistent with 45 CFR §154.230, concerning Submission
and Posting of Final Justifications for Unreasonable Rate Increases.
|