Rate Change Justifications

Annually, Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc. ("Kaiser Permanente"), files Small Employer and Individual rates for approval from the Maryland Insurance Administration, the Virginia Bureau of Insurance and the Washington, D.C., Department of Insurance, Securities, and Banking.

As part of the rate filing and approval process with these agencies, plan issuers such as Kaiser Permanente are required to post a summary narrative on the their websites that explains the reasons behind the requested rate actions.

In general, the primary drivers behind Kaiser Permanente’s rate request are:

• The rising cost of hospital inpatient and outpatient care, professional services, prescription drug and other ancillary goods and services, as well as increasing usage of these goods and services.
• New Federal and/or state mandated benefits. The magnitude of the rate impact for these mandated benefits changes from year to year based on the mandate(s) introduced.
• Increasing taxes and fees required under the Affordable Care Act (ACA). Taxes and fees are associated with the Health Insurance Provider Fee (HIPF), Transitional Reinsurance Program, Patient-Centered Outcomes Research Institute, Risk Adjustment Program, and Exchange Administration. Of these, the HIPF is the primary driver. Under Federal law, the total HIPF to be collected on health insurance nationwide is:
  • $8 billion in 2014
  • $11.3 billion in 2015 and 2016
  • $13.9 billion in 2017
  • $14.3 billion in 2018
  • After 2018, the fee is expected to collect $14.3 billion indexed to the rate of growth in premiums from health insurers nationally.

For More Information

Once the state agencies and the D.C. agency have completed their rate review and approval process, a summary of their results may be found on the applicable website:

• Maryland Insurance Administration
• Virginia Bureau of Insurance
• D.C. Department of Insurance, Securities, and Banking