Insurance companies that sell policies on and off Connecticut’s Affordable Care Act exchange stunned advocates in July when they demanded an average 20.4% increase on health plans individuals next year.
The proposed rate increases, released by the state Department of Insurance last month, also include a recommended 14.8% increase on small group health plans.
Requests are significantly higher than what insurers were looking for last year for 2022 health policies. In 2021, carriers requested an average increase of 8.6% on individual plans and 12.9% on small group shots.
“It’s breathtaking,” Lynne Ide, communications and engagement program manager at Connecticut’s Universal Health Care Foundation, said last month. “Looking at these rate requests, the ranges are off the charts.
“Our big concern right now is, coupled with inflation and the fallout from COVID, these proposed increases are causing problems. Our concern is that people are looking at it and deciding to go without health coverage because they just can’t afford it.
The insurance department is evaluating the claims and is expected to issue a decision in September. Before that happens, the public will have a chance comment on proposed rate increases.
The Department of Insurance has scheduled a public hearing for August 15, beginning at 9 a.m. at the Legislative Office Building (300 Capital Ave. in Hartford).
The public can testify in person or virtually. Registration for in-person testimony opens at 8:30 a.m. at the Legislative Office Building on the day of the hearing.
The deadline to register for the virtual testimonial is today (August 12). Anyone wishing to testify virtually can register by emailing [email protected] with their name and written remarks by noon.
Insurance company representatives will have time to explain their rate hike requests, and insurance department officials will be able to ask questions. The hearing will be broadcast on CT-N.
Here’s what you need to know about the proposals.
What does insurance require?
Three insurers sell fonts on the Connecticut exchange: Anthem Health Plans, CTCare Benefits Inc. and ConnectiCare Insurance Company Inc.
Anthem requested an average increase of 8.6% for individual policies that cover 27,698 people. The proposed changes range from a decrease of 1.8% to an increase of 16.1%, depending on the plan.
The company also sought an average upside of 3.6% on small group policies that cover 19,271 residents. Suggested changes range from a decrease of 1.2% to an increase of 26.3%.
CTCare Benefits requested an average increase of 24.1% on individual plans which cover 75,003 people. The proposed changes range from an increase of 18.7% to 33.2%, depending on the policy.
He also looked for an average increase of 22.9% on small group plans that cover 3,476 residents (increases range from 20% to 28.9%).
ConnectiCare, which only sells individual policies on the exchange, asked for an average increase of 25.2% for plans covering 8,782 people. The suggested increases range from 17.1% to 32.2%.
A full list of on-exchange and off-exchange plans, as well as rate hike requests, can be found here.
Why do insurers charge higher rates?
ConnectiCare spokeswoman Kimberly Kann said medical and pharmaceutical costs were two of the factors behind the company’s requested price increase.
“Our proposed rates are based on several factors, including medical and pharmaceutical cost trends, as well as the ongoing impacts of COVID-19 on our members’ use of services, including obtaining deferred care,” said she declared.
“In addition, legislative and regulatory environments continue to present market challenges beyond the company’s control, including the loss of enhanced advanced premium tax credits provided through the expiring American Rescue Plan Act. in 2022, and state-mandated benefits.”
Alessandra Simkin, spokesperson for Anthem, said, “Our filing reflects our experience and ability to deliver on behalf of consumers in this market and we look forward to working with the state as we continue the regulatory process.”
Insurers will send representatives of their companies to a public hearing in August, where they will be questioned in more detail about the proposed increases.
What happens next?
Insurance department actuaries will review the requested increases. As part of the review, they will look at trends in unit cost (total expenses incurred by the business), service usage, and expected severity of claims. The department will ask questions of the insurers and seek clarification if necessary. It will also hold a public hearing to get input from carriers, health care advocates and the public.
After review, the department may approve the entire requested increase, reject it, or change it to a different number. Final changes are expected to be released in late August or early September.
Are proposed rate increases still approved?
Last year, for example, the state insurance department approved an average rate increase of 5.6% for 2022 individual health plans, even though carriers had asked for 8.6%.
The department authorized an average rate increase of 6.7% for small group policies, while insurers had asked for 12.9%.
In 2020, Anthem Health Plans requested an average increase of 9.9% for its individual plans, which served 22,071 people through the exchange. The insurance department approved a 1.9% increase.
In the same year, ConnectiCare Benefits Inc. sought an average upside of 5.5% for its individual plans on the stock exchange, which at the time covered 75,174 clients. The insurance department sign down 0.1%.
What was the reaction?
Health care advocates have criticized the proposed increases, saying they fear more people will be covered because prices are too high.
“My jaw hit the ground, obviously,” said Ted Doolittle, the state’s health care advocate. “I am deeply concerned that people will go without coverage because of these high prices. It is the responsibility of insurance companies and providers to explain to the people of the state why this is unavoidable and that there is no alternative.
Ide, of Connecticut’s Universal Health Care Foundation, said the proposed increases “don’t seem to make sense.”
“Why would one carrier ask for 8.6% in the individual market on average and 3.6% in the small group market, and the other carrier would ask for 24% and 22% in those two markets – it looks like they pulled the numbers out of a hat,” she said.
State Attorney General William Tong has called for a special hearing that would allow officials to gather evidence and thoroughly question insurers about their proposed increases. Officials could cross-examine witnesses and present their own evidence in a public place.
The insurance department did not accept the formal hearing.
“Health care costs and insurance premiums are already unaffordable for many Connecticut families, businesses and individuals, and these double-digit rate hikes demand careful consideration,” Tong said.
When does open registration start?
Registration open for 2023 health policies begins November 1.