Looking for greater transparency on how insurers calculate and charge for premiums? The state of NJ is intending to provide just that. A recent measure adopted by the state legislature would require all insurers to gain approval by the state’s regulatory agency before they can raise premiums.
THE ASSOCIATED PRESS
TRENTON — Health insurance carriers who serve individuals and small businesses in New Jersey may soon have to gain state approval before implementing rate increases.
These firms currently can set and increase rates just by filing the information with the state. But a measure planned by three state lawmakers would require that the firms gain approval for such actions from the state Department of Banking and Insurance.
It also would expand the jurisdiction of the state’s Division of Rate Counsel, which now has no say over health insurance rates, to create a watchdog for residents and small businesses.
“Residents deserve a watchdog, someone with the knowledge to advocate on their behalf when it comes to the complicated issue of rising health care premiums,” said Assemblyman Dan Benson, D-Hamilton Township (Mercer County), who said he will sponsor the measure with fellow Democrat Valerie Vainieri Huttle of Englewood.
Democratic Senate Majority Leader Barbara Buono plans to sponsor identical legislation, with both measures likely to be introduced by year’s end.
“This legislation will provide far greater transparency,” Benson said.
Ed Rogan, spokesman for the banking and insurance department, declined to comment on the proposal. As a matter of policy, the department does not discuss proposed or pending legislation.
Besides requiring the banking and insurance department commissioner to approve any rate increase, the proposed bill also would give the commissioner authority to reject proposed rate changes deemed discriminatory or excessive.
The commissioner and rate counsel would also have to jointly hold public hearings on any proposed premium increases for insurance contracts or policies in the Individual Health Coverage Program or New Jersey Small Employers Health Benefits Program market.
Information about premium increases, including an explanation of how carriers report and calculate health insurance premiums, also would have to be posted on the department’s website.
Currently, insurers in these plans are required to spend no more than 20 percent of the premiums paid on administrative expenses.
