Frequently Asked Questions

What is a premium rate?

A premium is the monthly payment you or your employer pays for health coverage. The premium rate is the term for a health plan’s base rate from which a specific premium is calculated. The base rate is adjusted by age, whether it is coverage for an individual or a family and geographic location to determine the unique premium you would pay for health care coverage. The total premium for family coverage is determined by summing the premiums for each individual family member. With respect to family members under the age of 21, the premiums for no more than the three oldest covered children is taken into account in determining the total family premium.

What is premium rate review?

The DMHC reviews proposed health plan rate changes and asks questions to health plans about their rate changes to ensure they provide detailed information to the public to support any rate increases. While the Department does not have the authority to approve or deny rate increases, its rate review efforts hold health plans accountable, ensure consumers get value for their premium dollar, and save Californians money.

The Department’s premium rate review program has saved Californians millions of dollars by negotiating lower premium increases or no premium increases when increased rates aren't supported.

What is the purpose of the DMHC Rate Review program?

Rate review promotes accountability and increases transparency within the health care industry and help consumers better understand how health plan rates are developed.

For more information about the DMHC Rate Review visit: rate review process page

What types of health plan products are subject to the premium rate review process?

Health plans that offer individual and small group coverage must file proposed rate increases with the DMHC. The DMHC reviews the proposed rate changes for these markets to ensure the proposed rate changes are supported and not unreasonable.

Health plans that offer larger group coverage must file annual aggregated rate information with the DMHC. The DMHC does not review large group rates, but holds a public meeting in accordance with statute to increase transparency.

How does the health plan spend my premium dollars?

Health plans use your premium dollars to pay medical claims, fund efforts to improve quality of care, cover administrative costs, and generate profit, if any.

What is Medical Loss Ratio?

Medical Loss Ratio (MLR) is the percentage of health plan premiums that a health plan spends on medical services and activities that improve the quality of care. Health plans offering coverage in the small group or individual markets to spend at least 80% of premiums for these purposes; health plans offering coverage in the large group market must spend at least 85%.

What factors do actuaries consider when reviewing a rate filing?

Some of the factors the DMHC actuaries consider in determining whether a rate increase is unreasonable include:

  • The health plan’s data regarding past health care costs and projections and actual experience on how often enrollees visited a doctor, where hospitalized , used prescription drugs and other plan services
  • The choice and validity of assumptions used by the health plan in developing the rate increase.
  • Rating factors used, such as geographic area factors.
  • Completeness and adequacy of the documentation supporting the rate increase.
  • The plan’s projected Medical Loss Ratio.

For more information about what factors actuaries consider, visit: http://www.dmhc.ca.gov/Portals/0/LicensingAndReporting/FinancialReports/dl8k.pdf

How long does it take to review a rate filing?

In general, the DMHC rate review process takes up to 60 days for a typical rate filing. However, very complex rate filings, or those with missing or containing inadequate information, may take longer to complete.

How often do health plans submit a rate change?

Typically, health plans submit rate changes quarterly or every six months for the small group market, and annually for the individual and large group markets. Rates, once reviewed, are in effect for twelve months.

Why does my health plan premium keep going up?

Health care costs for hospitals, doctors, prescription drugs and other health care services are increasing. This is due partly to inflation - how much more services cost one year versus the next. Costs also go up when individuals use more health care services than expected or when they require expensive care. Finally, factors such as an aging population, chronic health conditions (such as diabetes and heart disease) and changes in how providers deliver care also affect the rising cost of healthcare.

What can I do to lower my premium rate?

Plans must notify enrollees of a proposed rate change 60 days before it takes effect. If you are not satisfied with the increase you can shop for coverage through Covered California where you may be eligible for subsidies. You may also qualify for coverage through Medi-Cal.

What can I do if I feel my health plan premium increase is not fair?

You can submit comments on health plan premium rate filings that are currently under review by the DMHC. The Department will consider public comments as part of its review of the premium rate filing. Search Rate Filings You can also shop for coverage through Covered California where you may be eligible for subsidies. You may also qualify for free coverage through Medi-Cal.

How can I participate in the premium rate review process?

You can submit comments on health plan premium rate filings that are currently under review by the DMHC. The Department will consider public comments as part of its review of the premium rate filing. Search Rate Filings

You can also sign up to receive email updates using the Stay Informed module on the right side of this page.

What does the DMHC do to keep coverage affordable?

The DMHC reviews proposed health plan rate changes and asks questions to health plans about their rate changes to ensure they provide detailed information to the public to support any rate increases. While the Department does not have the authority to approve or deny rate increases, its rate review efforts hold health plans accountable, ensure consumers get value for their premium dollar, and save Californians money.

The Department’s premium rate review program has saved Californians millions of dollars by negotiating lower premium increases or no premium increases when increased rates aren't supported.

How can I view information on plan efforts to improve quality of care?

This information is included in a plan’s annual aggregate filing, you can view those filings here: Annual aggregate filings

Premium Rate Review Resources

California Department of Insurance (CDI) Rate Filings 
Search rate filings reviewed by the CDI. The CDI licenses and regulates some non-HMO health insurance in California.
www.interactive.web.insurance.ca.gov/apex/f?p=102:2:0::NO

Centers for Medicare & Medicaid Services (CMS):
States with an Effective Rate Review Program, as defined in 45 C.F.R. § 154.102, that elect to provide public access via a link to the rate information made available on the CMS web site should use:
www.ratereview.healthcare.gov

Covered California 
Health coverage marketplace that provides individual and family coverage.
(800) 300-1506
(888) 889-4500 (TTY)
www.coveredca.com 

Covered California for Small Business
Health coverage marketplace that provides coverage for small businesses and their employees.
(844) 332-8384
(888) 889-4500 (TTY)
www.coveredca.com/forsmallbusiness

Guidance Related to Premium Rate Filings
This Director’s Letter provides health plans with guidance related to premium rate review.
http://www.dmhc.ca.gov/Portals/0/LicensingAndReporting/FinancialReports/dl8k.pdf

Medi-Cal
Medi-Cal offers free or low-cost health coverage for California residents who meet eligibility requirements.  Most applicants who apply through Covered California and enroll in Medi-Cal will receive care through managed health plans.
www.dhcs.ca.gov/services/medi-cal/Pages/default.aspx

HealthCare.gov
Information and online search tools to help individuals and small businesses find information about coverage options, health insurance company premium rates, and costs of coverage in each state.
www.healthcare.gov/get-coverage/

Need Help with Your Health Plan?

Call the DMHC Help Center

1-888-466-2219

or submit an Online Complaint

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