State Health Insurance Rates To See Increase [Courant]

September 6, 2016

Article as it appeared in the Hartford Courant

Connecticut Insurance Department Allows Rate Increases
Thousands of people across the state will see their health insurance rates rise next year after the state Insurance Department approved significant policy rate increases requested by several different providers.

The approved rate hikes average almost 25 percent for individual policies and 13 for small group policies. The increases cover 17 filings by 12 different insurance companies.

Commissioner Katherine Wade said Friday that two of the factors driving the substantial rate increases were the end of federal reinsurance, which were payments to insurers meant to offset high costs of newly insured people under Obamacare, and the fact that patients in the individual market spent 10 percent more on care than they had in 2015.

“We understand that these rates will have an impact on consumers and their household budgets and we need to continue to look for ways to address costs while focusing on quality and access,” Wade said in a statement.

Insurers around the country have been asking for substantial increases for Obamacare individual plans, because patients buying individual plans have been sicker than the typical person insured by an employer. Some insurers have reacted to the higher demand for services by exiting Obamacare in many markets. In Connecticut, UnitedHealthcare decided not to sell next year, and nonprofit insurer HealthyCT failed, leaving just ConnectiCare and Anthem to compete in 2017.

After ConnectiCare and Anthem publicly defended their requests in early August, ConnectiCare increased its request from 17 percent to 27 percent “because it expected healthy individuals to leave the exchange market due to the exit of two insurers,” and forecast that as a result, its claims costs would jump.

ConnectiCare, which also covers about 37,100 people in individual plans branded as Solo —which are not part of the Obamacare exchange — was denied a 43 percent premium increase for Solo. It has until Sept. 7 to to submit new calculations.

Anthem, which has more than 56,000 active individual policies, sold both on and off Connecticut’s Obamacare exchange, asked for a 27 percent increase. The company will also have to resubmit its calculations. Regulators had multiple concerns, including the increases being excessive.

Aetna covers more than 36,000 people through employer-based plans at small companies in Connecticut. Those premiums, which are partly covered by the employer, will go up 23 percent instead of 28 percent.

The state regulators didn’t just reduce large increases. In the case of Oxford Health, which covers about 15,900 people at small employers, they rejected a 2.1 percent increase and required a 2.5 decrease.

Anthem was also ordered to recalculate its 11.6 percent request for small employer plans covering more than 42,000 people, as regulators said it was too high.

Gov. Dannel P. Malloy wrote a letter to U.S. Health and Human Services Department. He said, “I am very concerned and disappointed that these rate increases must occur. While I recognize that they are the reality, it is imperative that further action is taken at the federal level to stabilize rates.”

Sen. Kevin Kelly of Stratford, senior Republican on the legislature committee that oversees insurance,saidhe’s glad insurance regulators rejected Anthem’s Obamacare request and ConnectiCare’s Solo request. “However, I cannot ignore that most rates are going up, by an average of almost 25 percent for individual plans and almost 13 percent for small group plans,” he said. Kelly said he’s concerned that the premium increases “will only continue the destructive cycle of rising prices that scare people away from getting insurance in the first place.”