New Mexico insurance regulators stumbled into the actuarial spotlight this week via this story about a Blue Cross Blue Shield rate filing. BCBS wanted to increase rates on its individual health plans by 24.6%. But an independent actuary reviewed the filing and found very little supporting documentation.
The whole situation has become a bit of a dustup, to say the least.
BCBS said they didn’t supply more supporting data because, well, no one asked. The state provides a checklist of information it requires, and BCBS supplied that information.
The data they did supply didn’t support the rate request, according to the actuary, Allan I. Schwartz. For example, the filing used a 10% base trend, but data in the company filing only supported trend of 4% to 8%.
Now in New Mexico the Insurance Division is part of the Public Regulatory Commission, and the commission ordered a hearing on the rate hike. But the insurance regulators struck a deal just before the hearing: BCBS wouldn’t get 24.6%, but only 21.3%.
That deal didn’t turn out too well for Insurance Commissioner Morris “Mo” Chavez. He resigned. His interim replacement was Tom Rushton, who helped broker the deal. He’ll be retiring next month.
Meanwhile the Public Regulatory Commission ordered the insurance division to rescind the rate approval. If that happens, BCBS has promised to sue.
Now that’s all a pretty sticky wicket, but the biggest issue may just be morale at the Public Regulatory Commission. This lede from a left-leaning web site sums it up:
Criminal charges against one Public Regulation Commission (PRC) commissioner, the conviction earlier this month of another on two felony charges, a costly sexual harassment lawsuit, the hiring of a convicted embezzler, and repeated violations of the Open Meetings Act notwithstanding, Commissioner Sandy Jones blames the media for the PRC’s poor public image.
Fair enough – but the commission surveyed its employees and found that 80% were aware of unethical behavior, and 50% said they had been asked to do something they considered unethical.
The survey had room for individual comments, and boy there were some doozies.
A couple of things you should know:
- The commission redacted some of the personal accusations.
- Jerome Block is one of the commissioners.
There’s more interesting reading here.
Now I’ve never been to New Mexico and never submitted a rate filing there. I think there’s a chance that the insurance division has a morale problem.
However, I can’t comment on any of the suggestions above – except I’d recommend against a coffee shop. I think this crew is caffeinated enough.