Piggybacking off a national report which shows Connecticut’s that health insurance premiums have risen 95.9 percent over the past 10 years, state lawmakers said they are drafting legislation, which increases insurance industry regulation and forces insurance companies to factor in affordability when proposing rate increases.
“We have a system of insurance regulation that really is flawed and fatal,” Attorney General Richard Blumenthal said Wednesday at a Capitol press conference. “The best illustration of its failings came just within the last month when Anthem applied for rate increases on the individual and small business products effecting 56,000 people in the state of Connecticut.”
The hearing on Anthem’s requested rate increases resulted in the state Insurance Department granting it 16 to 20 percent increases, instead of the 22 to 30 percent rate increases it had requested.
“We were essentially denied effective redress,” Blumenthal, who participated in the July 20 hearing, said. “The system is broken and it must be fixed.”
Blumenthal argued that affordability ought to be taken into consideration when deciding these rate increases. Currently affordability is not considered, but affordability was one of the statistics highlighted by this Families USA report released Wednesday.
In the report Connecticut workers income increased from $32,106 to $36,276, or 13 percent, over the past 10 years. During that same period health insurance premiums rose 7.4 times faster than median earnings.
“The disproportionate damage done by these rate increases, the catastrophic effects are shown by these graphs, but behind these numbers and these graphs are individual human lives that are devastated and damaged,” Blumenthal said.
“Reform must require that the regulators really regulate,” Blumenthal said.
Connecticut’s Insurance Commissioner Thomas R. Sullivan said he doesn’t like increasing rates either and would be happy to hold more public hearings on health insurance rate filings, “as long as the legislature gives the Insurance Department the resources it needs.”
“I have no objection to having them,” Sullivan said in an emailed statement Wednesday afternoon.
“As I have stated on several occasions, companies better think twice before coming to this department with an unjustified rate increase, because if they do, it’s going to get denied, just as I denied Anthem’s request,” Sullivan said. “But, I live in a world where I have to judge the merits of each application based on the facts and in accordance with the law. As a regulator, I do not have the luxury of acting arbitrarily.”
Rep. Steve Fontana, D-North Haven, said over the past year the legislature’s Insurance Committee talked about ways in which the private market was failing consumers.
“Individual health insurance consumers are out there in the wild, wild west. They’re on their own,” Fontana said.
He said thankfully the Attorney General and state Healthcare Advocate Kevin Lembo knocked the Anthem rate increase down from “exorbitant to merely excessive.”
Lembo said they also learned during Anthem’s rate increase hearing that the company does not factor into its proposed increase whether or not people will drop the policy because they can no longer afford it. He said there’s also not requirement for Anthem to notify its customers to tell them about the proposed rate increases prior to the hearing.
“The lesson of the hearing was that consumer voices were not heard,” Lembo said.
He said if things go well during the next legislative session affordability and value will be considered in any future rate increases.
The draft legislation will be released at the beginning of the next legislative session in January.