Report Questions Health Care Premiums in Maryland

Elkridge, Md — A new report from the Maryland Hospital Association, Health Insurance Premiums: What are You Paying for? questions the huge difference between premium increases being sought by health insurance companies and the actual increases being allowed by the state insurance administration. The report also points out the lack of available information about how insurance premiums are set, and notes that Maryland insurance companies have had to repay millions of dollars they overcharged consumers under the new rules of federal health care reform.

According to the report:

• Premium increases requested by Maryland insurance companies so far in 2013 have ranged from 5.3 percent to 16.8 percent. Premium increases actually approved by the Administration for those requests were significantly lower – from 1.8 percent to 5.8 percent. In several cases, the approved premiums were less than a third of the request.

• Proposed premium increases recently filed under the state’s new health care reform-created insurance exchange are even higher, from 2.8 percent to 4.3 percent for the Kaiser Foundation Health Plan, from 6.4 percent to 87.5 percent requested by CareFirst BlueCross BlueShield, and from 29.4 percent to 120.4 percent increases requested by Aetna.

• Under the new rules of health care reform, health insurers overcharged Marylanders $22 million in 2012. Maryland health insurers ranked 11th largest in overcharge amounts among the 50 states, with an average rebate of $340 per covered family.

• Insurance company claims that premiums are increasing due to rising hospital prices don’t add up. Hospital revenues for all services have grown at low single-digit rates for several years. Hospital spending makes up nearly 40 percent of insurers’ costs; with hospital revenues growing at 5 percent or less, premium increases as high as 16 percent are difficult to explain.

"Maryland has a strong insurance administration with broad authority," said Carmela Coyle, President & CEO of the Maryland Hospital Association. "It is important for consumers and hospitals alike that the authority be fully exercised to scrutinize these exorbitant premium requests and the assumptions insurance companies are using to attempt to justify them."

About the Maryland Hospital Association
The Maryland Hospital Association is the advocate for Maryland’s hospitals, health systems, and their patients before legislative and regulatory bodies. Its membership is comprised of community and teaching hospitals, health systems, specialty hospitals, veterans’ hospitals, and long-term care facilities. For more information, visit www.mhaonline.org.

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