Kelly: Raising Insurance Rates will scare people away from getting insurance [CT News Junkie]

September 6, 2016

Article as it Appeared in CT News Junkie

The Connecticut Insurance Department denied rate requests from ConnectiCare Insurance Company and Anthem Health Plans because they were determined to be “excessive.” However, it did approve double-digit rate increases for several individual and small group health insurance plans.
Anthem and ConnectiCare, which requested 26.8 percent and 42.7 percent average rate hikes respectively, were told to recalculate their rates and resubmit them to the Insurance Department no later than Sept. 7. Anthem was also asked to resubmit its calculation for small group rates, even though they were not part of the public hearing process in August.

Anthem’s individual plans cover 56,700 people and their small business plans cover another 42,200.
An Anthem spokeswoman said it is reviewing the department’s decision.

CTCare Benefits Inc., the ConnectiCare company that offers individuals plans on the Access Health CT exchange, originally requested a 14.3 percent rate hike. But it later revised that to 27.1 percent. Regulators approved a range of rate increases from 15.4 and 24.8 percent, with an average of 17.4 percent. The company’s on-exchange plans cover 47,597 people.

ConnectiCare had originally requested an 24.3 percent increase in its off-exchange plans, which it revised the day before the public hearing to 42.7 percent. That request was denied by regulators. The company’s off-exchange plans cover 37,142 individuals.

“ConnectiCare is still studying the Connecticut Insurance Department’s decision on our recent rate requests and evaluating what our next steps will be,” a spokeswoman for the company said.

For 2017, the average individual rate increase on and off the exchange is 24.48 percent and the average small group rate increase on and off the exchange is 12.88 percent.

The average rate increase that the Insurance Department approved this year has substantially increased, a fact that Insurance Commissioner Katharine Wade acknowledged in a statement accompanying the department’s decisions.

“The Connecticut market is experiencing what other states have seen this year — rising health care costs, increased demand for services, and significantly higher prescription drug costs. Therefore, in some cases higher rates were actuarially justified,” Wade said. “Under the ACA more people are covered and more are using their insurance. That increased demand for services, sunset of the federal reinsurance program, and volatility in the ACA’s risk adjustment program have had a major impact on rates for next year.”

Tom Swan, executive director of the Connecticut Citizen’s Action Group, said it’s amazing how the Insurance Department was able to spin a 25 percent increase in health insurance rates.

“By highlighting her denial of requests from two companies, and by using a three-year average, Commissioner Wade tried to mask the largest rate increase approval in Connecticut’s history,” Swan said. “Her rationale reads like talking points she would be writing if she was still officially lobbying for the industry.”

Gov. Dannel P. Malloy wrote U.S. Health and Human Services Secretary Sylvia Burwell to tell her that something needs to be done.

“I am very concerned and disappointed that these rate increases must occur,” Malloy said. “While I recognize that they are the reality, it is imperative that further action is taken at the federal level to stabilize rates. To fail to act is to fail consumers in Connecticut and nationally.”

Malloy said he would like to see steps, such as changing the federal risk adjustment program, taken now to help lower rates for 2017.
In early August, ConnectiCare officials told regulators that the federal risk adjustment program is one of the reasons it proposed such a steep increase in its rates.

The program rates a carrier’s population and requires companies in the same market with a healthier population to pay those with a sicker population. Eric Galvin, chief financial officer for ConnectiCare, said during the hearing that the program doesn’t account for changes to a carrier’s population.

Sen. Kevin Kelly, R-Stratford, said he’s pleased that two of the highest rate requests were denied, but said he can’t ignore that “rates are going up by an average of almost 25 percent for individual plans and almost 13 percent for small group plans.”

He said that’s “significantly more than we saw last year and these rate increases will without a doubt be a hard hit for many families.”
Insurance regulators are not allowed to consider the affordability of these plans as part of its review. Healthcare advocates complained during the public hearing process that Connecticut needs to change its criteria to include affordability as a factor.

“Raising rates may be a short-term solution to the challenges faced by insurance companies, but such increases will only continue the destructive cycle of rising prices that scare people away from getting insurance in the first place,” Kelly said.

In addition to denying requests from Anthem and ConnectiCare, insurance regulators also approved requests for several companies, even though some of the proposed rate hikes were reduced.

Golden Rule Insurance Company had its request knocked down from 32 percent to 2 percent. The plan covers 1,256 lives. Cigna had its 6.6 percent rate increase approved, and Aetna had its 27.9 percent rate increase approved.

In the small group market, insurance regulators approved CTCare Insurance Co.’s request. The company, which is part of ConnectiCare, originally requested a 14.7 percent increase and later revised that to 15.6 percent. Regulators ended up approving a 14.9 percent average rate hike for about 47,883 individuals covered by that plan.

Oxford Health Insurance Co. requested a 2.1 percent rate hike for its small business plans, but the department opted instead to reduce their current rates by an average of 2.5 percent. The plan covers about 15,912 people. Another Oxford — Oxford Health Plans (CT) Inc. — had its request for a 2.6 percent increase approved. That plan covers 1,748.

Aetna Life Insurance Company had its 28.2 rate request knocked down to 23.4 percent. The plan covers about 36,067 people.
Harvard Pilgrim Health Care of CT had originally proposed a 8.2 percent rate hike and revised it to 11.3 percent. The Insurance Department actually boosted that plan’s increase to 15.4 percent. The plan covers 986 lives.

HPHC Insurance Company Inc. had originally requested a 4.9 percent increase and later revised it to 8.1 percent. Regulators increased the request to 12 percent. The plan covers 8,251 people. UnitedHealthcare Insurance Co. had its 5.2 percent increase approved. Its plan covers 207.