The order the Texas Department of Insurance issued Sept. 2 outlawing a pricing practice called price optimization was announced as a homeowners’ insurance measure, and the governor’s release discussed it entirely in those terms. The document itself is broader. It is addressed “To: All insurance companies and their agents and representatives,” the department files it under the subject heading “All TDI Regulated Entities,” and the letter that ordered it told the commissioner to write it “for all TDI-regulated products.”
That makes it the first instruction on how to set prices that Texas has issued to health insurers and health maintenance organizations in more than a year — and it lands while the department is still sitting on 17 undecided requests to raise individual health premiums for 2027.
Price optimization is the practice of setting a customer’s premium partly on how likely that customer is to shop around rather than on the risk the customer represents. Someone who has stayed with the same company for a decade gets a larger increase than an identical new customer, because the company predicts they will pay it. Bulletin B-0007-26 declares that unlawful in Texas. “Price optimization turns loyalty into a pricing factor,” it says. “Texas law requires rates to be based on risk, not on whether a consumer is likely to tolerate a higher price.”
The operative sentence is unqualified: “Any use of price optimization in the ratemaking or pricing process, or in establishing a rating plan, is unfairly discriminatory and violates the Insurance Code.” The bulletin sets a standard that reaches beyond loyalty alone — “any practice that results in two policyholders with the same risk profile getting different premium increases is unfairly discriminatory under Texas law” — and closes with a threat: “Failure to fully comply is a violation of Texas law, and appropriate enforcement action will be taken.”
How far that reaches into health coverage is a question the department has not answered publicly. The bulletin cites three parts of the Insurance Code. One, Chapter 2251, is the property-and-casualty rating law. The other two are not: Chapter 544 bars unfair discrimination and expressly reaches “the benefits payable under a policy or contract of insurance,” and Chapter 560 prohibits certain rates. The department has issued seven bulletins this year and labeled four of them “Property and Casualty.” It did not label this one. Its last bulletin directed specifically at life and health insurers was issued July 31, 2025.
The order came from Gov. Greg Abbott. In a signed letter to Insurance Commissioner Amanda Crawford dated Aug. 24, Abbott directed the department to “Issue a bulletin for all TDI-regulated products banning the practice of ‘price optimization,’ whereby insurers use personal data unrelated to insured risk to set prices.” Abbott said in the Sept. 2 announcement that the average annual homeowners’ premium in Texas had risen 79 percent in six years.
The same letter carries a deadline that has drawn no attention and is nine days away. “TDI shall also identify additional administrative actions that can be taken immediately and any statutory changes needed to protect consumers and make insurance products more affordable,” Abbott wrote. “These recommendations should be provided to my office by Monday, September 14, 2026.”
Nothing in the letter limits that list to homeowners’ coverage either. Whatever the department sends the governor on Sept. 14 becomes the starting point for insurance legislation when lawmakers return in 2027, and health premiums are the piece of the market where Texans have the least protection and the fewest choices.
The department is the agency that reviews Texas health insurance rates, an authority the Legislature gave it in 2021. Insurers filed their 2027 individual-market requests by the June 15 deadline. As of Sept. 3, none of the 17 Texas filings recorded on the federal rate review site had a final decision; the largest request on the table would raise premiums by roughly a third. ACA Signups, a site that tracks marketplace rate filings, calculated Aug. 28 that Texas insurers are asking for a weighted average increase of 14.1 percent on individual coverage.
Commissioner Crawford now has to decide those filings under a standard her own agency declared two days ago: that rates must rest on risk and nothing else.