CNMI Department of Commerce

Rate Review Office

On March 23, 2010, U.S. President Barrack Obama

signed into law US Public Law 111-148:The Patient Protection and Affordable Care Act (“PPACA”).

On March 27, 2011, the CNMI Department of Commerce received funding from the US Department of Health and Human Services, Office of Consumer Information and Insurance Oversight to maintain compliance with those sections of the PPACA that added and amended Section 2794 of the Public Health Service Act (“PHSA”).

Background

As amended by the ACA, the PHSA directs the Secretary

of Health and Human Services, in conjunction with the states and beginning in 2010, to establish a process for the annual review of so-called “unreasonable” premium rate increases in the individual and small group markets

The CNMI was given the resources to develop and implement an effective health insurance premium rate review process, as well as to develop a draft statute and accompanying regulations to enable implementation of the rate review process.

Background

According to the final rule, HHS determines if a state has an

effective premium rate review process based on the following criteria:

(1) whether the state receives from health insurance issuers data and documentation sufficient to determine whether a rate increase is unreasonable;

(2) whether the state conducts an effective and timely review of the data and documentation submitted by issuers in support of a proposed rate increase;

(3) whether the state review examines the reasonableness of the assumptions used by the issuer in developing its rate proposal and the historic data underlying those assumptions and data related to past projections and actual experience;

Effective Rate Review

(4) whether the state review takes into

consideration certain specified factors; (5) whether the state applies a standard set

forth in state statute or regulation when making the determination of whether a rate increase is unreasonable;

(6) whether the state provides access from its website to information regarding proposed premium rate increases, and has a mechanism for receiving public comments on the same.

Effective Rate Review

In the CNMI

The sole statute governing the business of insurance in the CNMI, or the Commonwealth Insurance Act of 1983, provides little to no instruction to either the territorial government or the health insurance issuers as to the process by which the latter is to submit proposed premium rate increases.

It simply creates the position of the Insurance Commissioner, within the CNMI Department of Commerce, with the general power and duty to administer the statute and promulgate rules and regulations necessary to effectuate the same

In terms of substantive instructions to

insurers, the statute is only textually developed in the basic areas of whom is qualified to be an insurer, how an issuer goes about applying for a license and/or a certificate of authority to operate as an insurer, and what constitutes prohibited acts in the operation of that business

In the CNMI…..

To assist the CNMI in implementing the ACA

Reforms, HHS provided funding in the form of 3 Grant Cycles

Cycle I: Implement an “effective” Rate Review Process

-CNMI Premium Rate Review Process- CNMI Rate Review Repository Interface and Database System

Cycle III: Development of IT Database for Pricing Transparency

Federal Assistance

On March 29, 2012 a Request for Proposals were

issued to the Public regarding Development of a Premium Rate Review Process.

The contracting team, WPEDG (Washington Pacific Economic Development Group) was given the Notice to Proceed in June 2012 headed by Mr. Juan Carlos Benitez

As a result, in December 2012, the team was able to formulate an Effective Premium Rate Review Process

Premium Rate Review

IT Contract: Ledge Light Technologies (NJ) Development of Portal and linkage with State

Electronic Rate and Form Filing (SERFF)- Allow CNMI Insurance carriers the opportunity to upload their files for review - Allow RRO to review documents and make recommendations to Insurance Commissioner- Allow the Public to make comments on the proposed rate changes submitted by

Insurance Carriers

CRRRIDTS….

Cycle II: Enhancement of the CNMI Premium

Rate Review Process- Technical Actuarial Services- Consumer Outreach- Actuarial Services- Harmonization

Cycle II- Enhancement

The Insurance Commissioner has identified the

need for a Technical Advisor- Assist CAP and RRO in ensuring the CNMI complies with ALL market reforms of the ACA

- Assist RRO in speeding up the necessary work needed to have office become fully “effective”

- Tentative Date of Hire: Early January

Technical Services

Upon completion of the CRRRIDTS, the RRO

will be responsible for informing consumers of Proposed Rate Increases as well as to encourage the Public to provide comments via CRRRIDTS

-Possible launch in mid-late January

- Provide access to the Public regarding carrier submissions

Consumer Outreach

The need for an Actuary will be more ideal as

Insurance Carriers begin filing rates

Responsible for review and recommendations to RRO Project Manager

Two Phase Project (Dependent on Carrier Submissions)

Actuarial Services

Harmonization Project: Contractor is assessing the

feasibility of streamlining processes with the U.S. Territory of Guam

- Most carriers providing Health Insurance in the CNMI also provide services in Guam

- Analyze Guam’s “effective” Rate Review process to possibly sync with CNMI Processes

- Possibility of pooling both populations to lower costs

Harmonization

CAHIT: CNMI ACA Health Insurance Team

-Sixto Igisomar, Secretary and Insurance Commissioner-Reena Patel, Asst. Attorney General (Commerce)-Charlette C. Borja, Insurance Licensing Spec.-Kaitlyn Neises-Mocanu, Consumer Advocacy Officer-Brien S. Nicholas Jr., Project Manager (RRO)

Currently….

On-going Draft Legislations:

- Amendment to CNMI Insurance Code

- CNMI Rate Review Legislation

Currently….

Several Administrative Notices have been issued

from the Dept. of Commerce Insurance Section to Insurance Carriers

- Admin Notice: 2013-03: Implementation

- Administrative Notice 2013-04: Early Renewal

- Admin Notice 2013-05: Transitional Policy regarding Individual and Small Group Health Plans

Currently….

CONTINUED….

- Admin Notice 2013-06: Grandfathered Plans and Policies in the CNMI

- Admin Notice 2013-07: Rate and Form Filing

Note: Notices may be found on the Commerce Website:(www.commerce.gov.mp) or CAP Website: (cnmicap.wordpress.com/)

Currently….

Cycle III Funds from HHS:

- Database Development

- Public Health Records and Statistics

- Pricing Transparency

- Projected Time of Execution: Summer 2015

Looking Forward

Upon completion of the Funding Cycles, the

Dept. of Commerce plans to continue its efforts through:

- Rate Review Examinations- Consumer Advocacy and Outreach- Market Conduct Examinations- Financial Analyst/Examiner (Solvency)

Looking Forward