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.
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.
WASHINGTON, June 22, 2022 /PRNewswire/ -- The American Academy of Actuaries has released a public policy issue brief that points to the possible expiration of two signature pandemic-era measures that boosted health insurance affordability and coverage as among the drivers of potential premium changes for individual and small group plans in 2023.
"Proposed health insurance premium rates reflect many factors, which can include the effects of legislative and regulatory changes," said Academy Senior Health Fellow Cori Uccello. "This is especially true for 2023 rates, due to the possible expiration later this year of enhanced Affordable Care Act (ACA) premium subsidies and of a key support of Medicaid coverage during the pandemic."
The issue brief, developed by the Academy's Individual and Small Group Markets Committee, Drivers of 2023 Health Insurance Premium Changes, discusses these key factors and others that may account for differences in premium rates being filed with state insurance departments this year for 2023, compared to 2022 rates. The factors are illustrated in a new infographic as well.
The American Rescue Plan Act of 2021 (ARPA) increased advanced ACA premium tax credits in 2020 and 2021 for all eligible income brackets, including extending tax credits to those who earn over 400% of the federal poverty level. These subsidies, which make plans more affordable, are set to end with the expiration of ARPA on Jan. 1, 2023, reversing enrollment gains and possibly worsening plan risk pools.
Provisions in the Families First Coronavirus Response Act (FFCRA) increased federal fiscal aid to states for covering Medicaid enrollees during the pandemic-related Public Health Emergency (PHE), contingent on the states suspending their usual processes for redetermining eligibility for Medicaid coverage. These provisions are set to expire at the end of the quarter in which the PHE is not renewed, which could happen this year. In that event, states could restart the usual redetermination process, meaning some individuals who received Medicaid coverage during the pandemic could no longer be eligible for Medicaid and shift to the individual market, the employer group markets, or become uninsured—a shift that could affect risk pools in the individual and small groups markets.
Other factors expected to drive premium rate changes for 2023 include changes to the composition of the small group market due to the continued shift of small employers to self-funded, level-funded, or other risk-rated coverage, or otherwise leaving the market; changes in utilization patterns for telehealth visits and for mental health care; and changes in provider contracting including the expected impacts of medical inflation. The costs of preventing, testing for, and treating COVID-19, while expected to stabilize, could also be important factors for certain health insurance plans, depending on projected trends in the pandemic, particularly should a new variant emerge that is not mitigated by the immunity provided by prior infections or vaccinations. State-level measures such as reinsurance programs aimed at lowering premiums could also reduce premiums, with an outsized reduction in the first year of new reinsurance programs.
The American Academy of Actuaries is a 19,500+ member professional association whose mission is to serve the public and the U.S. actuarial profession. For more than 50 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.