OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

sSB-194

AN ACT CONCERNING RATE APPROVALS FOR CERTAIN HEALTH INSURANCE POLICIES.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 11 $

FY 12 $

Insurance Dept.

IF - Cost

387,500

387,500

Note: IF=Insurance Fund

Municipal Impact: None

Explanation

The bill would result in a cost to the Department of Insurance (DOI) of $387,500 in both FY 11 and FY 12 to implement new rate filing procedures, which include requiring public hearings for filed rate increases of more than 10%. It is estimated that there would be 31 rate filings1 that would meet this threshold annually. These hearings would require outside actuarial hearing officers to review the filing, operate the hearing, and prepare and submit documents (including public comments) at the cost of approximately $500 an hour. Assuming twenty hours of work per hearing, the total cost for a hearing officer would be $10,000 per hearing. Transcriber costs would also be incurred at $2,500 per hearing. Costs are detailed below:

Item

FY 11 $

FY 12 $

Hearing Officers

310,000

310,000

Transcriber

77,500

77,500

TOTAL

387,500

387,500

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to the number of rate increases filed with DOI that meet the threshold of a greater than 10% rate increase.

1 Based on the number of actual filings for subdivisions (1), (2), (4), (11) and (12) CGS 38a-469 in 2009 that exceeded the 10% trigger, as reported by DOI.