Rejected

To some, the Public Regulation Commission is best known for being cozy with the companies it regulates. So it might have come as a surprise when the PRC's Insurance Division rejected a proposed 9.9 percent rate increase from health insurance giant Blue Cross Blue Shield on Oct. 11.

The request came on the heels of approved BCBS rate increases in 2009 and 2010 at respectively 20 percent and 21 percent. Commissioner Jason Marks, who represents Albuquerque, came out in full support of the denial.

"There's questions about [how BCBS] is doing everything they can to control medical increases," Marks, who worked 16 years in health care finance, tells SFR.

Marks says one of BCBS' justifications for the rate increase included the claim that rural health care costs are higher urban health care.

"Frankly, rural costs are lower," Marks says.

In a statement, BCBS says it lost $10 million in the state in the past year, enough to justify a rate increase of 26 percent. BCBS mentions it hired an actuarial firm "known for its independence and unbiased review of health insurance rate filings" to conduct a study to justify the rate increase, but doesn't name the firm.

Marks says some of the rate increases are probably justified, but not all. "They're sitting on billions of reserves," he says of BCBS.

BCBS has since requested public hearings with the PRC to explain why the rate increase is needed. Just when those will happen remains to be seen.

"They have a burden to prove," Marks says. "If there are still questions, they need to answer all of them before increasing rates."

Santa Fe Reporter