Rate hike justifications are 'trade secrets,' insurers say

Health insurers in New York don't want the reasons behind their rate increase requests to be made public, claiming they're "trade secrets."

Now that consumers can view health plans' proposals to increase premiums online--as well as their explanations for those rate hikes--insurers are fighting to keep their justifications from the public because they say competitors could use those trade secrets against them, reports the New York Times.

The issue came to a head when Benjamin Lawsky, the state superintendent of financial services, ordered the insurers' explanations be made public. "How these companies are setting these rates is vital for the public to know, and should not be treated like a state secret," Lawsky said. "Transparency will promote healthy competition and enable the public to rigorously comment on proposed rates, two goals that all of us should favor."

In response, 10 insurers sent letters to Lawsky, arguing that disclosure would provide competitors with an unfair advantage that could lead to reduced competition and higher prices, the Times notes. Aetna, for instance, wrote that "public disclosure in this format will provide ready and easy access to comprehensive pricing, product and marketing strategies." Independent Health said it spent "well over $700,000 developing the trade secret documents" and estimated that the value of keeping them confidential was much higher.

Meanwhile, Excellus Health Plan said disclosing the information would give competitors an "unjust economic windfall" because the "proprietary pricing information would permit competitors to calculate, among other things, Excellus' administrative costs and margins. These competitors would then be able to precisely target which components of Excellus' rating methodology to undercut," reports Buffalo Business First.

To learn more:
- read the New York Times article
- see the Buffalo Business First article

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