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State Claims Health Overhaul's Insurance Rates Are A Trade Secret

Jeff Trexler

North Carolina has taken one of the last steps in setting up a new online marketplace for health insurance plans, a cornerstone of the president’s health care law. The state’s Department of Insurance announced Tuesday it has approved the rates health insurance companies can charge on the marketplace, but it will not release those rates.

The marketplace, also called an exchange, is a website in each state, where consumers can compare insurance plans from different companies, with different levels of coverage. The health care law banks on the idea that these exchanges will foster competition and drive down cost. New York, Maryland, and Indiana are among the states that have approved and published their rates. Supporters and opponents have eagerly awaited that information as an indication of how the health law will affect the overall cost of insurance.

In North Carolina, the Department of Insurance says the rates are a trade secret that cannot be disclosed.

“I think a lot of these companies want that, because they don’t want to expose what they’re planning on offering to their competitors while they’re still in the process of having these plans approved,” says spokeswoman MarniSchribman.

A spokesman for BlueCrossBlueShield of North Carolina reiterated the same message—the company does not want to release the information, to avoid tipping off competitors.

Approval from the federal government—expected next month—is the last step, but the numbers will not become public until the exchange opens for business on October 1.

Timothy Jost says consumers should want that information as soon as possible. Jost is a consumer representative for the National Association of Insurance Commissioners.

“We really want them to compete with each other, that’s the whole purpose here,” Jost says. “If you release the prices now, [insurers] have a couple of months to rethink and say, ‘well, maybe we’d actually like to come in with a lower price, because we actually want your business.’”

Most of the others states that have approved plans for their exchanges have released the information publicly. In New York, insurers claimed the information was a trade secret, but the state rejected those claims. Minnesota does consider its rates trade secrets, although the state’s health agencies have asked insurers to release the information before the exchanges open. 

North Carolina’s trade secret law is based on the same model legislation as most other states, the Uniform Trade Secrets Act. Business and intellectual property lawyer David Hathaway says companies often claim trade secrets that would not hold up in court.

“Whenever courts really delve into the issue of whether something qualifies as a trade secret under the statute, a small percentage actually meet the test,” says Hathaway.

Hathaway expressed skepticism that the approved rates would be valuable and secret enough to qualify as as a trade secret under the law.