Nine insurance companies have asked the state Insurance Department to approve double-digit rate hikes for individual and small business health insurance plans that start in 2023. The proposed average individual rate request is a 20.4% increase compared to 8.6% in 2022.
The department “has received 13 rate filings from nine health insurers for plans that will be offered on the individual and small group market, both on and off the state-sponsored exchange, Access Health CT,” Insurance Department Commissioner Andrew Mais said. “Working within the authority granted to this department, we will closely examine these filings to make sure the requested rates are consistent with state law.”
ConnectiCare Benefits is proposing an average 24.1% increase for its individual plans offered on the exchange.
The company argues it’s because the demand for services has increased. That factor is expected to have a projected impact of 12.1% on the insurer’s claims costs, according to their filing. They also point out the subsidies offered under the American Rescue Plan Act put in place in 2021 are expected to go away in 2023. They say they expect fewer customers to be qualified for the advanced premium tax credit and they expect consumers will leave the individual marketplace.
As a result of the departure of customers, the insurance company expects the average morbidity of the risk pool to go up and lead to an unfavorable impact on the 2023 rates.
More than 75,000 individuals are now covered by that plan. The company is also requesting a 23.6% increase for its individual plans marketed outside the exchange. The company is also requesting a 22.9% increase for its on-exchange small business plans and a 24.5% increase for small group plans marketed outside Access Health CT.
Anthem Health Benefits, the other insurer that offers plans on Connecticut’s exchange, is asking for an average 8.6% increase for its on-exchange individual plans.
The company says about 9.2% of that increase can be attributed to medical cost inflation, provider contracting changes, and an increase in demand for those medical services. The plan currently covers about 27,698 individuals.
Anthem is requesting an average increase of 3.6% on small group health plans for employers with 50 or fewer workers.
Cigna Health and Life Insurance Company filed a request to increase rates an average of 19.64% on small group policies. Oxford Health Insurance requested a 13.4% increase for health plans used by 50 or fewer workers and a 15.7% increase for HMO plans used by 50 or fewer workers.
UnitedHealthCare Insurance company requested an average rate increase of 13.9% for small group plans. And Aetna Life Insurance Co. submitted a rate filing for an increase of 14.1% for small group indemnity plans that provide major medical and prescription drug coverage for employers with 50 or fewer workers.
Harvard Pilgrim Health Care and HPHC both decided to leave the Connecticut market and will no longer offer new business small group health plans. They will only renew existing plans through the end of their appropriate plan years.
Sen. Matt Lesser, co-chair of the Insurance and Real Estate Committee, said these proposals are “jaw dropping.” He said they will have a serious impact on small businesses and individuals and he wants to make sure the Attorney General and the Healthcare Advocate are involved in the rate review process.
Attorney General William Tong is requesting a formal hearing on the rate proposals because they exceed 10%.
“Healthcare costs and insurance premiums are already unaffordable for many Connecticut families, businesses and individuals, and these double-digit rate hikes demand rigorous scrutiny,” Tong said. “The Department of Insurance has previously agreed to hold public rate hearings on any rate increase exceeding 10 percent, and that transparency is certainly needed now. We cannot simply allow insurers to assert costs and claims without our own independent analysis and review.”
“They owe the public an explanation and they should provide one if they want to get any rate increase,” Lesser said.
As far as solutions go, the Connecticut General Assembly offered few if any answers this session about how to solve the problem of escalating health care costs.
Republicans blamed Democrats for not taking action.
“These proposed rate increases are staggering and infuriating,” Senate Republican Leader Kevin Kelly and Sen. Tony Hwang, said. “They show not only the growing damage of inflation, but also the damage of CT Democrats repeated refusal to address rising health care costs. We knew this day was coming, we warned it was coming, and that’s why CT Republicans offered solutions to prevent it – solutions Democrats repeatedly rejected.”
They added: “”This year, Senate Republicans once again proposed a plan to rein in out-of-control health care costs. Access Health CT’s own estimates show our plan reduces premiums by $6,475 per year, or $540 per month for the average family. But leading Democrats on the state’s Insurance Committee refused to even hold a vote on that plan.”
Democrats in turn blamed Republicans.
“These rate requests show that my colleagues, including almost every Republican, who believed the industry that reform wasn’t needed and who fought the Public Option were hoodwinked,” he said.
“The system is fundamentally broken,” Lesser said. “The rate increases they’re proposing today is proof positive the market isn’t working.”
He added: “This outrageous proposal is proof they need to be rescued from themselves.”
Healthcare Advocate Ted Doolittle said he’s also calling for a formal hearing the rate hikes.
“The Office of the Healthcare Advocate believes that any premium rate request based on excessive medical costs is itself by definition excessive,” Doolittle said.
He said they need to “explain and justify the internationally abnormal, inflation-fueling prices underlying these massive rate requests.”
The Insurance Department will review the proposals and make a final decision — likely in September — for rates that will take effect on Jan. 1. There is a 30-day public comment period that starts today.
Click here for the rate proposals and to comment on them.
Colorado became the first state in the country to have a state-designed health care insurance option for its residents approved by CMS last Thursday.
Approval of the Colorado Option through the federal1332 waiver now means the state can proceed with rate setting for its standardized health insurance plan, which is mandated to be sold at lower prices and should be finalized by summer’s end to take effect in 2023, culminating a decade’s worth of health policy efforts aimed at reducing health care costs.
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Those efforts include the state’s reinsurance program, which was extended for an additional 5 years last year and spreads risk across the health insurance market to help insurers pay expensive claims, and the Hospital Provider Fee that supports hospitals serving Medicaid and uninsured patients.
The Division of Insurance recently finalized its reinsurancepayment parameters for 2023 that aims to maximize rate reductions, increase enrollments, and improve morbidity all while encouraging engagement and competition among carriers and providers in the individual marketplace.
In its most recent legislative session, Colorado enacted 3 pieces of consumer protection legislation, House Bills1284,1285, and1370, all designed to lower health care costs.
HB 1284 requires emergency medical services to be billed at the in-network rate regardless of the facility and guards against unexpected and costly charges. HB1285 prohibits hospitals from pursuing debt collection if federal price transparency standards are not followed, requiring providers to publicly post their standard pricing for various services.
Meanwhile, HB 1370 requires carriers to implement a copayment-only structure for prescription medications in at least a quarter of their health plans.
CMS hailed Colorado as a national leader in health care cost reduction efforts.
“Through thisnew model, Colorado leverages federal savings to expand affordability and coverage in the state like no other state has done before,” said CMS Administrator Chiquita Brooks-LaSure. “The Colorado Option is groundbreaking and a step in the right direction to reduce the uninsured rate, while investing in health insurance coverage affordability and improvements, and advancing health equity. We encourage all states to consider innovative ways to use section 1332 waivers in the future to expand and improve coverage and lower costs for their residents.”
Passed in 2021, the Colorado Option instructed state regulators to write up a “standardized plan”—a consistent package of benefits and cost structures like co-pays—that insurance companies are mandated to sell with premiums 5% below what they were in 2021, after inflation adjustments. That target increases to 15% below by 2025.
Offered only on the individual and small group markets, the plan is designed to save the federal government on its existing insurance premium subsidies by creating what are known as “pass-through” savings that can come back to the state.
The state’s waiver application estimates those savings would amount to $13.3 million in 2023 and $147.9 million by 2027.
The moves come as Coloradans struggle with higher costs of living.
In the current environment of inflation, cost of living has emerged as a “serious” problem according to nearly 90% of those recentlypolled by the Colorado Health Foundation. In its adjacentpoll, two-thirds of Coloradans characterized the cost of health care as a “very serious” problem.
This sentiment was reflected by the Colorado electorate who voted for moderate candidates in Republican primaries, results that reflect broad support for “kitchen table” issues, according to local politics reporter Marianne Goodland.
The percentage of personal consumption expenditures on health care services climbed to 14.9% in 2019 prior to the pandemic.
Source: Colorado Department of Health Care Policy and Finance
The inflationary trends have insurance companies skeptical that reduction targets can be met while being actuarially sound. The Colorado Association of Health Plans stated that the methodology used to calculate inflation, the Consumer Price Index’s medical index, will not reflect the true rise in costs being seen on the ground.
That delay in care along with the persistent workforce shortage have contributed to rising health maintenance costs, according to the Colorado Hospital Association (CHA), as providers struggle to meet the pent-up demands of a growing population.
“Much of the focus of state policy in recent years has been on health care affordability,” said Katherine Mulready, Chief Strategy Officer and Vice President for Legislative Policy at CHA. “The reality is that when supply outstrips demand, prices rise. So this does not portend well for affordability, which in turn, doesn’t portend well for access. We’re talking about both indirect access of costs, but also direct access.
The provider is not there when you need them to be there. There’s not a lot of optimism I can paint in that picture right now other than we’re doing everything we can to stave off [the] continued crisis.”
Providers nationwide are coordinating efforts to reimagine health care where telemedicine is emerging as a solution to meeting demand and improving access.
Mulready said the association is utilizing new tools and roles as a part of that reimagination, such as advocating a policy that would allow greater use of certified registered nurse anesthetists in advanced practices to manage some anesthesiologist services.
“The policy principle that underlies all of our workforce is allowing the market or allowing employers the flexibility they need to continue to deliver high quality and accessible care,” Mulready said. “As long as we can find a professional who has the experience and training to do the tasks that’s being contemplated, we should be able to use them and we shouldn’t see artificial limitations on their scope through their licensing boards or other places. Some of that’s reimbursement policy, some of that’s licensing policy, some of its facility policy, but there’s a lot of work. [CHA is] invested there to try to advance that reimagination of care delivery.”
Gov. Jared Polis has made clear his administration’s goal of lowering health care costs for consumers. In 2020, for instance, Polis vetoed a bill that would have increased coverage for alternative opioid treatments over concerns the measures would increase private insurance costs.
As costs rise and the midterm elections approach, health policy advocates will look to continue striking that balance between holding the line on health insurance prices and adding benefits for Coloradans in next year’s legislature.