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June 22, 2017

The Honorable Al Redmer, Jr.

Insurance Commissioner
Maryland Insurance Administration
200 St. Paul Place, Suite 2700
Baltimore, Maryland 21202

Dear Commissioner Redmer:

We have received several letters and phone calls from concerned constituents regarding proposed
individual market health insurance rate increases. We are writing this letter on behalf of our
constituents to urge the Maryland Insurance Administration to give these rate increase requests a
thorough review.

We recognize that there are many factors creating upward pressure on insurance rate increases,
including federal political uncertainty that is significantly undermining the individual health
insurance markets around the country. It is unclear whether the Trump administration will enforce
the individual mandate and maintain subsidies initiated by the prior administration. These political
factors weigh heavily on the minds of carriers when they submit their proposed rate increases to
the Maryland Insurance Administration. But we do not believe that those purchasing insurance
should bear the entire burden of those risks and the potential costs at the current time.

Maryland has a public policy imperative to facilitate citizen access to a fair minimum price for an
essential service such as health care insurance. When changes to federal policy significantly
impact the rate projections (and risk pools) of insurance carriers, those carriers should return to the
MIA or offer those projections separately to be considered when those changes occur. Carriers
should not hedge against their policy holders interests when there are other ways to account for
political risks. One such solution, as California managed, was to offer multiple scenarios based
on policy decisions yet to be made. For example, the MIA is already breaking out the variable for
the Cost Sharing Reduction payment continuation and the same idea should be embraced for the
other projections of political risk such as the enforcement of the individual mandate.

Even setting aside the federal policy risks, there are other areas of the various carriers rate increase
requests that the MIA should carefully consider. These issues include planned contributions to
insurance reserves, projected morbidity rates, projected medical trend rates, and overhead costs
being assumed.
We recognize many fundamental issues destabilizing the market and driving insurance premium
hikes are beyond the state's control. We join the MIA and others to pressure federal officials to
enforce the individual mandate, continue paying subsidies, maintaining the Medicaid
enhancement, and expanding access to healthcare.

In conclusion, we encourage the MIA to take a hard look at the details of the proposed rate
increases. Furthermore, we support the MIA policy of not authorizing rate increases premised on
hypothetical impacts of federal policies, but instead allowing insurers to return to the MIA if the
circumstances warrant it.


Susan C. Lee C. William Frick Ariana B. Kelly Marc A. Korman