Pa. regulators probe health insurers’ rate increases, use of ‘health profiling’ to set fees

Pa. regulators probe health insurers’ practices

HARRISBURG, Pa. — Pennsylvania regulators said Wednesday they have detected a pattern of rate increases by health insurance companies that suggests insurers are trying to pad revenues before federal health reforms are fully implemented.

Gov. Ed Rendell said the Insurance Department was investigating the state’s nine largest health insurers over the use of what he described as questionable health profiling tools.

Insurance Commissioner Joel Ario said there was evidence that some companies recently have expanded their use of individualized medical questionnaires and drug profiling in the small-group insurance market. Ario also said there were attempts to “identify and drive up premiums for the most vulnerable groups.”

Rendell said some small businesses have been hit with 50 percent cost increases.

“This level of increase is not about passing on increases in health spending, which average in the 5 percent to 10 percent range,” Rendell said in a news release. “This is about companies trying to get the highest possible rates before the federal reforms take effect.”

Sam Marshall, president of the Insurance Federation of Pennsylvania, said a state review of the nine largest insurers, including four his group represents, began in February. Last week, the Insurance Department sought more details about the use of medical underwriting for small group and individual business customers, he said.

Marshall said the practice was not new, and that his members understood medical underwriting — evaluating whether to insure people and how much they should pay, based on their health — would not be permitted once the federal health reform law is fully implemented in 2014.

“Somebody says ‘pattern of rate increases,’ I don’t know what that means,” Marshall said.

The Insurance Department said it would pursue a grant from the federal Department of Health and Human Services to help it monitor insurance premiums and rate increases.