Insurance companies that sell policies on and off Connecticut’s Affordable Care Act exchange are seeking an average increase of 20.4% on individual health plans next year, alarming advocates who fear people will forgo insurance because they can’t pay.
The rate hike requests were released by the state Insurance Department Friday. On small group plans, the carriers are asking for an average increase of 14.8%.
The requested increases are substantially higher than those sought last year for 2022 health policies. Carriers in 2021 asked for an average hike of 8.6% on individual plans and 12.9% on small group plans.
“It’s jaw dropping,” said Lynne Ide, program lead for communications outreach and engagement at the Universal Health Care Foundation of Connecticut. “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 spell trouble. Our concern is that people will take a look at this and decide to go without health coverage, because they just can’t afford it.”
“My jaw hit the floor, obviously,” added Ted Doolittle, the state’s health care advocate. “I’m deeply concerned that people will go without coverage because of these high prices. It is incumbent on the insurance companies and the providers to explain to the people in the state why this is inevitable and there is no alternative.”
Three insurers are selling policies on the 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 hike of 3.6% on small group policies that cover 19,271 residents. The suggested changes range from a decrease of 1.2% to an increase of 26.3%.
CTCare Benefits asked for an average hike of 24.1% on individual plans that cover 75,003 people. Proposed changes range from an increase of 18.7% to 33.2%, depending on the policy.
It also sought an average hike of 22.9% on small group plans that cover 3,476 residents (increases range from 20% to 28.9%).
ConnectiCare Insurance Company, which only sells individual policies on the exchange, requested an average increase of 25.2% for plans that cover 8,782 people. Suggested hikes range from 17.1% to 32.2%.
The proposed increases “don’t seem to make any sense,” Ide said. “Why one carrier would be asking for 8.6% in the individual market on average, and 3.6% in the small group market, and the other carrier is asking for a 24% and 22% in those two markets – it looks like they pulled the numbers out of a hat.”
Proposed increases for plans that are off the exchange are also varied, as the chart below indicates.
Kimberly Kann, a spokeswoman for ConnectiCare, said medical and pharmaceutical costs were some of the factors driving the rate hike request.
“We remain extremely mindful of the impact that rate increases have on our members and strive to keep our plans as fairly priced as possible within the reality of today’s health care environment,” Kan said in a statement. “Our proposed rates are based on several factors, including medical and pharmacy cost trends, along with the continued impacts of COVID-19 on our members’ utilization of services, including obtaining delayed care. Also, the legislative and regulatory environments continue to present market challenges outside of the company’s control, including the loss of the enhanced Advanced Premium Tax Credits provided through the American Rescue Plan Act set to expire in 2022, and state-mandated benefits.”
“We’re proud to have been offering individual plans from the beginning and look forward to continuing to serve people who need these plans,” Alessandra Simkin, a spokeswoman for Anthem, said in a statement. “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.”
The insurance department will hold a hearing in early August at which insurers will have a chance to testify on the reasoning behind their proposed increases, and the public will be able to weigh in as well. A date has not yet been set for the hearing.
In addition to the carriers, Doolittle said pharmaceutical company officials and medical providers should attend and provide their rationale for rising costs.
“We’re in a medical cost crisis,” he said. “The rate review process is the one opportunity, the one public forum, that the people of Connecticut have to ask, ‘Why? Why are these hospital prices so high? Why are these drug prices so high?’ The premiums are simply a reflection of the underlying high medical costs.”
“Health care costs and insurance premiums are already unaffordable for many Connecticut families, businesses and individuals, and these double-digit rate hikes demand rigorous scrutiny,” Attorney General William Tong added in a statement. “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.”
The public can also submit comments online. Comments may be submitted here (under each policy, click the “select” button and fill in the “comments” box, then hit “submit comment”).
Officials with the insurance department will make a decision on rates for 2023 plans later this year, typically in September. Last year, though carriers sought an average increase of 8.6% on individual plans, the department instead granted a 5.6% average hike.
Open enrollment for 2023 health policies begins Nov. 1.
There's a chance your health insurance company owes you some cash.
Depending on how you get your coverage, you may be one of the 8.2 million policyholders expected to get a piece of $1 billion in premium rebates this fall from various insurers, according to a preliminary analysis from the Kaiser Family Foundation.
The amount is down from $2 billion issued in 2021 and a record $2.5 billion in 2020.
"In the last couple of years we've seen some really large rebates — twice the size of this year's amount," said Cynthia Cox, a vice president at the foundation and director of its Affordable Care Act program. "But I'd say $1 billion is still significant."
More from Personal Finance: IRS working to boost audit rates for higher earners The U.S. job market is still hot — at least for now How to pay for college after a financial setback
Generally, you're more likely to see a rebate if you have an individual policy (including through a state health exchange or the federal one) or participate in a small- or large-group plan. (Many of the biggest U.S. employers choose to self-insure, which means their plans don't have to adhere to certain requirements placed on insurance companies. Different rules also apply to Medicare and Medicaid coverage.)
So why are the rebates going out?
Basically, insurance companies that sell group or individual policies must adhere to a "medical loss ratio" requiring them to spend at least 80% of premiums paid by enrollees on health-care costs and certain other expenses related to patient health. (For large group plans, the ratio is 85/15.) If that threshold is not met, enrollees are reimbursed the difference.
Each year, the ratio is calculated based on a rolling three-year average. So the rebates this year derive from insurance companies' financial data from 2019, 2020 and 2021.
This year's refunds — which will go to eligible participants enrolled last year — work out to about $141 per plan participant in the individual market, $155 in the small group market and $78 in large group plans, according to the Kaiser analysis. However, that amount can vary widely, depending on your location and insurer.
Insurers typically either send a check to policyholders or deduct the rebate from premiums (and send a check to individuals no longer enrolled but owed some money). Be aware that if you are in a group plan, your employer may split the rebate with you, Cox said.
If you're entitled to a rebate, you should receive it by Sept. 30.