The payer has been operating through a rehabilitation program under former Pennsylvania Insurance Commissioner Jessica Altman after a court order made her responsible for making the company solvent. The company is allegedly facing a $1.2 billion deficit and shrinking benefits while increasing premiums to recoup losses.
Louisiana was one of the first states to challenge the move, which impacts members in states around the country. In December 2021, Louisiana Insurance Commissioner Jim Donelon threatened to file a lawsuit to block the rehabilitation plan, saying if left unchecked, could result in “potentially disastrous rate increases or benefit reductions,” according to Biz New Orleans.
Iowa followed suit, filing a petition in court to block the move. Iowa Insurance Commissioner Douglas Ommen said that rates could rise as much as 675 percent.
Most recently, Washington state Insurance Commissioner Mike Kreidler announced March 1 that he did not approve the increases, which will affect 1,200 members in the state.
He said the plan “disproportionately puts the burden of the company’s insolvency unfairly onto policyholders and ignores their rights under states’ guaranty fund associations,” and ordered the payer to stop asking Washington stakeholders to sign letters accepting the rate and benefit changes.
