For Consumers

How we review health rates

We review all rate requests for individual and small-group plans (employers with 1-50 employees) in Washington state. Health insurance companies can't change rates more than once a year, unless state or federal law requires a new health benefit.

What we do

We scrutinize the company's projections and what they're based on, including the last three years' rates, enrollment, and claims.

We also examine the following information to see if the rate change is reasonable in relation to the plan's benefits:

  • The rates, claims and administrative costs are consistent with what the company reported in its financial statement.
  • The actual vs. projected medical and prescription-drug costs.
  • The assumptions used to project the medical and prescription-drug costs, including changes in these costs, and in the benefit design.
  • The actual vs. projected administrative costs, including expenses such as agent commissions, taxes, salaries, case-management activities, claims and appeals-processing costs, customer services, etc.
  • How much profit the company expects to make; this is generally called "contribution to surplus" or "projected profit." Whether this amount is considered reasonable depends on the company's current level of surplus, as well as the type of business.

If we believe the rate request is justified, state law requires us to approve the increase.

If we don't believe the rate increase is justified we deny the increase. The insurer can then revise its rate-increase request, or it can request a hearing.

How my premiums are determined