The review process started in June, when carriers submitted plans to the Division of Insurance (DOI) for approval. The review process takes about three months and includes the following steps.
- First, DOI analysts ensure that plan filings are complete, i.e. that all data elements and all necessary supporting documentation has been submitted.
- Next, DOI undertakes an in-depth review, looking at the justification for changes in the premiums and/or benefits. The costs incurred in paying claims are evaluated, as well as the factors that impacted the costs of those claims.
- Additionally, DOI verifies the actuarial value of the plans, which indicates what portion of medical expenses a plan will pay versus the out-of-pocket costs for consumers. For example, if a plan has a 70% actuarial value, it should pay about 70% of covered medical expenses, with the remaining 30% to be paid by the consumer. In general, plans with a lower actuarial value have lower monthly premiums. But they require a higher amount of out-of-pocket payments from the consumer. Federal law established four tiers for actuarial value.
- Bronze – 60%
- Silver – 70%
- Gold – 80%
- Platinum – 90%
There is also a level called “Catastrophic.” These plans are only available to those under 30, or who demonstrate a severe financial need. Catastrophic plans have an actuarial value less than a bronze plan (60%). While they are an affordable option for those who qualify, catastrophic plans are not eligible for APTC.
DOI also ensures that the rating practices used by the carrier are in compliance with state and federal regulations. For example, under the ACA, carriers are only allowed to use four factors in determining the premiums: 1) age, 2) family structure, 3) geographic rating area, and 4) tobacco use.