Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. 3. Insurance Company and HMO Profile Reports



The TDI produces HMO and indemnity health insurance company profiles which are available electronically. Data in the profiles are as follows:

  • HMO profiles - The HMO profile contains information including: number of complaints, enrollment and utilization, financial information and NCQA accreditation information. The profile contains the number of justified complaints for the year to date for the last three years for each HMO. These individual HMO profiles do not put the complaints data in context by expressing it as a complaints ratio related to volume of business, or by comparing it with the industry average.
  • Insurance company profiles - the indemnity insurance company profiles include three different complaint measures, each expressed for the last three years. The measures are:
  • Justified complaints - the number of justified complaints closed against the company for the line of insurance;
  • Complaint ratios - the number of total closed justified complaints divided by the number of policies the company had in force for the line of insurance; and
  • Complaint indices - this is calculated by dividing the company's percentage of complaints for a specific line of insurance by the company's percentage of policies in force for the same line of insurance. The average index is 1.00. A number less than 1.00 indicates fewer complaints than average, while a number greater than 1.00 indicates more complaints than average.

Assessment of the Report

Consumer friendliness - Regulators commented that consumers are using both the insurance company and HMO profiles and finding them to be very helpful.

However if consumers are interested in comparing the performance of multiple plans (whether for insurance companies or HMOs), company-specific information is, by definition, less useful. Instead of a comparative report card which consumers can use to shop for insurance, the company-specific information puts the onus on consumers to search individual profiles. To a certain extent, this is inevitable in a state like Texas which has over 2,000 licensed insurance companies. Providing comparative complaints data for every individual company in a comparative reports card would produce a lengthy and unwieldy report. Given this difficulty, TDI regulators noted that they will shortly be compiling the insurance company industry indices into a table format available on the web site.

TDI already compiles the HMO complaints data into an electronic report (Attachment 8). This report lists the total number of complaints, justified complaints, enrollment and ratio of justified complaints per 10,000 enrollees. By including industry average data, consumers can easily compare the performance of individual HMOs to an industry standard.

A further comment on the insurance company complaints data is that consumers may find the inclusion of both complaints ratios and indices confusing, and will probably struggle to understand the different concepts. In addition, the complaints ratio for insurance companies is calculated differently than the complaints ratio for HMOs. The insurance company complaints ratios are based on the total number of closed complaints divided by the total number of policies in force. Most other states express complaints ratios as the complaints per 10,000 members, rather than the total policies in force. (Note: The method used by many other states is also the methodology used in the calculation of the Texas HMO complaints ratios.) Use of a single method to calculate complaints rates across all insurance lines would be simpler for consumers.

Monitoring patient protection implementation - As the HMO profiles do not contain disaggregated data on the type of complaints, these profiles are not directly useful in monitoring the implementation of patient protection legislation.