Optima Health Plan’s post-deadline effort to more substantially lower its 2019 health insurance premiums on Virginia’s Affordable Care Act marketplace has been rejected by state regulators — and a local group that formed in protest of Optima’s rates is happy about the decision.

The case before the State Corporation Commission involved a back-and-forth about whether Virginia’s Bureau of Insurance, the body responsible for reviewing health insurance rates in the state, set reasonable requirements for filings, and whether private companies can revise filings to make them more competitive.

After being surprised by a last-minute decision by Anthem HealthKeepers to return to the ACA marketplace in Central Virginia, Optima asked to reduce next year’s premiums, but missed the state deadline for revising rates. The company claimed Anthem’s re-entry would cost Optima the majority of its customers and about $400 million in revenue. In a decision Thursday, the commission upheld the bureau’s ability to set deadlines and chided Optima for its late attempt to lower rates.

“The decision not to submit its most competitive rates by the August 10th filing date was Optima’s, and Optima’s alone,” the commission wrote. “Only after seeing a more competitive (and timely submitted) rate filing did Optima attempt to submit lower or more competitive rates after the filing date.”

Optima is the only insurer on the federal marketplace in the Charlottesville area in 2018, and local customers this year faced the highest increase in premiums in the nation.

Under public pressure, Optima proposed slightly lower premiums for the Charlottesville area for 2019. Its request to further lower 2019 rates, submitted after the bureau’s deadline and Anthem’s entry into the marketplace, would have substantially lowered premiums further in the region and across the state.

Before Anthem announced its entrance in the market, Optima was projecting to cover 59,525 Virginians in the state; if Optima is not allowed to further lower its rates, the company said in its complaint to the State Corporation Commission, it expects to lose 40,000 consumers.

But the Bureau of Insurance responded that it gave the company ample time to lower its rates and address concerns.

“The reality is: Optima was unwilling to offer better rates,” the bureau wrote to the commission on Aug. 29, “until after HealthKeepers came forward on Aug. 10 with a more competitive bid.”

The bureau wrote that allowing companies to revise rates after deadlines have passed will confuse consumers and make a repeat of last year’s scramble likely. In 2017, 11th-hour revisions by insurers — including Anthem — and changes from the federal government sparked fears that some people in the state might have no options on the individual market.

“Carriers who continue to feel prejudiced by shifting deadlines may ultimately decide to withdraw from Virginia’s health insurance market,” the bureau wrote. “This would leave Virginia consumers with fewer and likely more expensive health insurance options.”

The commission agreed, finding that the bureau has consistently and reasonably used deadlines to oversee rate filings and that inconsistency would jeopardize the state again.

“Virginia’s individual market has been affected even more than many other states, as evidenced by the disruption last year, when it appeared for several months that consumers in many counties and cities in Virginia would have no option at all for obtaining insurance in the individual market,” the commission wrote in its decision. “The Bureau’s actions in 2018 have been reasonable and rational responses to individual market conditions it did not create, but which it must consider in carrying out its statutory duties.”

The grassroots group Charlottesville for Reasonable Health Insurance, formed in the wake of the revelation of Optima’s 2018 rates, wrote a statement supporting the bureau.

“As a grassroots consumer advocacy group that exists only because of Optima’s price-gouging in 2018, particularly in the Charlottesville area, we want to make it clear to the [bureau] and the [commission] that it is NOT in consumers’ best interest to allow Optima to reduce its rates after an established deadline and only because a competitor (Anthem) reentered their markets with better pricing,” the group wrote on its Facebook page on Sept. 5.

The group has criticized the bureau over the past year, saying it takes a laissez-faire approach to enforcing federal guidelines and is not proactive enough in protecting consumers. The bureau’s decision to oppose Optima’s request to revise rates, the group wrote in the Facebook posting, is a good step at taking a firm stand with companies.

“Enforcing the Aug. 10 deadline [to revise 2019 rates] and denying Optima’s petition means Optima and all other insurers will understand in future years that it is a risky proposition to overcharge consumers in uncompetitive markets, and that doing so may result in unexpected market share losses if a competitor increases its service areas late in the process,” the group wrote. “Insurers will now be motivated to offer competitive rates even when it seems they may have monopolies.”

On Thursday, the group posted a short message on Facebook praising the commission’s action, saying, “There will not be a repeat of 2018!!!”

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Ruth Serven Smith is a reporter for The Daily Progress. Contact her at (434) 978-7254, rserven@dailyprogress.com or @RuthServen on Twitter.

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