THE BUREAU OF NATIONAL AFFAIRS: HEALTH PLAN & PROVIDER REPORT - JUNE 26, 2002
Maryland Denies CareFirst Rate Increase
Maryland regulators denied June 18 two small business rate increase requests from CareFirst BlueCross BlueShield that would have taken effect July 1, invoking a state law requiring insurance plans offered to small businesses to spend at least 75 cents of every premium dollar on medical claims.
A spokeswoman for the Maryland Insurance Administration said rather than attaining a 75-percent "loss ratio," CareFirst had a ratio of 73 percent in 2001. A representative from CareFirst told BNA that although there are no immediate plans to resubmit rates, the company is "moving diligently" towards the 75 percent ratio. The health plan had said the rate increases were justified by increased costs.
According to a statement issued by Maryland Insurance Commissioner Steven B. Larsen's office, CareFirst sought a 16.5 percent increase for its Washington, D.C.-based BlueChoice HMO plan, and a 12.4 percent increase for the Preferred Provider Organization plan issued by Group Hospital and Medical Services Inc. Larsen's office had approved prior rate increases for the two plans last year, which took effect on Jan. 1, 2002, and will not be affected by this denial. CareFirst also proposed smaller increases for the District of Columbia market that were approved by the D.C. Department of Insurance and Securities Regulations and take effect in July, a spokesperson for the D.C. agency told BNA.
