Find rates for health insurance carriers inMaryland, or comment on a carrier's request to change rates.
Health insurance companies develop rates using estimates of future claim costs, administrative expenses, and profits.
• Claim costs: The amount a health insurance company expects to pay for health care services and goods, such as physician services, hospital fees, and prescription drugs, on behalf of all policyholders with similar policies. This amount does not include any deductible or copayment paid by the
• Administrative expenses: The cost of administering a health plan. These costs can include:
-salaries of health plan employees;
-costs to maintain computer systems to pay claims;
-costs to manage the provider network (signing up doctors, setting payment rates, etc.);
-commissions for agents and brokers (called “producers”);
-premium taxes (a percentage of premium that health plans pay to the State of Maryland);
-certain federal taxes and fees (for example, federal income taxes); and
-other costs to administer the policy (for example, fraud detection activities).
• Profit: Money that the insurance company has left after paying for claims and administrative expenses. Some of this money is saved to pay for claims and administrative expenses in years when the plans do not collect enough
premiums to cover those costs.
¹As used in this document, the term “health insurance company” includes insurers, HMOs and nonprofit health service plans that offer a health benefit plan in Maryland.
Health insurance companies estimate total claim costs for all policyholders with similar policies based on the following:
• which types of services will be used (for example, X-ray or MRI);
• how many services policyholders will use;
• where policyholders will go for services (for example, a doctor’s office or an emergency room);
• the average amount paid to medical providers for each service across all Maryland policyholders with similar policies; and
• the portion of the cost of services that the health plan will pay(total cost minus any deductibles, copayments, or coinsurance amounts for which the member is responsible).
Each item in the list above typically is estimated using past history of the policies, adjusted to reflect expected increases or decreases in total claim costs (“trend”), and any changes in covered services.
Your premium will not go up solely because you have claims, just as it will not go down solely because you do not have claims. People buy insurance to protect themselves from the full financial burden of future events. Insurance is a pooling
of risks, so individuals pay a share of the pooled experience in exchange for getting the coverage they purchased. If you have an individual or small employer policy, your premium is based on the claims of everyone with your type of policy.
If you have coverage under a large employer health plan, your premium will be based in part on the claims of everyone in the group.
If you buy your own health insurance or have coverage through your employer, your premium may change because:
• of your age; or
• you added another family member to the policy.
In addition, if you have coverage through your employer, your premium may change from year to year because your employer is paying more or less of the total premium.
If your rate increased, and you buy your own health insurance, check with your insurance producer to find out the exact cause. If you have coverage through your employer, your human resources benefits office may be able to provide this information.
If you are covered under an individual or small group health benefit plan, generally your premium will not change more often than once every 12 months. Health plans are permitted to raise or lower premiums more frequently than once
every 12 months if the change is due solely to the enrollment of new family members or the removal of one or more family members from coverage under the policy.
Yes. The MIA does not have the authority to review rates for:
• health benefit plans that are offered through the federal government, including the federal employee health plans and TRICARE;
• Medicare, Medicaid, or other federal health plans;
• employee plans that are self-funded by an employer (for example, the State of Maryland, Verizon, Montgomery County Public Schools, and General Motors); and
• some plans issued in other states.
Health insurance companies must show that a requested premium rate follows
Maryland law. Also, the requested premium rate must meet or exceed the federal and state loss ratio requirements. The loss ratio is the percentage of premium used to pay claims. The MIA does not approve a requested rate change if it is:
• Excessive: (A rate that is unreasonably high in relation to the benefits provided and the underlying risks);
• Inadequate: (A rate that is unreasonably low in relation to the benefits provided and the underlying risks. If a rate is inadequate, the health plan may not be able to pay future claims.); or
• Unfairly Discriminatory:(A rate that is not applied consistently within a rating category, such as age, geographic area, family tier, or plan of
When reviewing a rate filing, MIA actuaries also examine the data, methods, and assumptions used by the health insurance company to support that requested rate.
• the proposed rates and benefits to make sure they comply with Maryland
• the future estimated loss ratio using the requested premium rate to make
sure it meets the minimum requirements;
• changes in the number of members covered under the policies;
• changes in medical and pharmacy costs;
• past and future administrative expenses;
• changes in cost sharing;
• changes in benefits;
• profit history, future profit goals, and any changes to profit goals from
previous rate filings;
• history of loss ratios;
• history of rate changes;
• the company’s financial strength;
• the accuracy of the calculations supporting the rate change; and
• any other factors that contribute to the requested rate change.
• Maryland law requires health insurance companies to provide an annual notice to
their policyholders, and to post a notice on their websites, explaining that
policyholders may find proposed rate changes on the MIA’s website and may
submit comments regarding those proposed rate changes.
• Rate filings for individual health and small group insurance products are open
to public comment. When a health insurance company submits a rate change
request that is open to public comment, consumers can read the company’s
justification for the request and submit comments on the MIA’s website. The
MIA generally accepts public comments for 30 days from the date the rate
change request is posted on its website. You can find all of this information at www.healthrates.mdinsurance.state.md.us.
• Once the MIA completes its review and makes a decision about the
rate filing, a summary of the decision is posted on the MIA website at www.healthrates.mdinsurance.state.md.us.