Health Insurance Rate Review

What is an independent Actuary?

A private, health care actuarial and consulting business hired to review rate filings according to a specific set of standards.


In 2013, Montana was granted a level of rate review authority known as “file and use”.  Now, for the first time, health insurers are required to submit their rate increases and justifications to the Commissioner's office 60 days before the rates take effect. If the Commissioner disagrees with a rating factor, the insurance department has an opportunity to work with the insurer to resolve the issue before the rate takes effect.

The Commissioner's office has contracted with independent actuaries to conduct the rate review process.

Health insurance premiums have risen rapidly, straining budgets for American families and businesses. Since 1999, the health insurance premiums for family coverage have risen 131 percent. (, Dec. 20, 2010.) Premium increases have forced families to spend more money for less coverage. And insurance companies have been able to raise rates without explaining their actions or justifying the reasons for their high premiums. Obamacare brings an unprecedented level of scrutiny and transparency to health insurance rate increases.

Rate review protects Montana's families and businesses from unreasonable premium hikes at the state level and gives consumers and companies direct access to experts at the Commissioner's office who understand our communities and our markets.

What the CSI Does

The CSI, in conjunction with the contracted actuary, reviews proposed rates to make certain they are not ”excessive, inadequate or unfairly discriminatory”. Factors used to validate the request include:

Company Coverage History

  • past and future claims experience;
  • the past and future medical loss ratio describing how much of every premium dollar goes to pay health care claims
  • product development and startup costs, drug and other benefit costs or expenses, and product age and credibility;
  • whether the proposed change in the premium rate is necessary to maintain the health insurance issuer's solvency or to maintain rate stability and prevent excessive rate increases in the future;

Medical Trends

  • trend projections related to utilization and service or unit cost;
  • changes to covered benefits or health plan design, along with actuarial projections concerning cost savings or additional expenses related to those changes
  • allocation of the overall rate increase to claims and nonclaims costs;
  • allocation of current and projected premium for each enrollee each month;
  • changes in the health insurance issuer's health care cost containment and quality improvement efforts following the health insurance issuer's last rate filing for the same category of health plan;

Administrative Costs

  • overall financial strength of the company, including but not limited to surplus, reserves, and investment savings
  • employee and executive compensation data from the health insurance issuer's annual financial statements;
  • past and future administrative costs and medical and hospital expenses, including medical trends