Hugh McQuaid file photo
Advocates crash Anthem’s 2010 rate review public hearing (Hugh McQuaid file photo)

The last time the state denied its request to increase insurance rates nearly 20 percent, but this year Anthem Blue Cross and Blue Shield, is asking for a much lower increase of 12.9 percent.

The state’s largest insurer submitted its 12.9 percent request to hike premiums for more than half, or about 25,000, of its individual health insurance customers on Aug. 31.

In its filing with the Insurance Department it said it needs to increase premiums because of increasing claims, state and federal mandates, and increased utilization of services.

“Anthem does not want the cost of health care coverage to continue to increase,“ the company said in a statement. “Unfortunately the use of various high cost services including hospital care, new technologies, other expensive diagnostic services, and prescription drugs are increasing – and we owe it to our members to cover those costs and ensure access to a broad network of providers.”

Since the rate request doesn’t exceed 15 percent it doesn’t trigger an automatic public hearing and it’s unclear if one will be scheduled. Insurance Commissioner Thomas Leonardi or State Healthcare Advocate Victoria Veltri could request one.

Last year Anthem came under fire from health care advocates and consumers who balked at its requested for a 19.9 percent increase. Last November, advocates disrupted the public hearing on the Anthem rate increase and lawmakers responded by passing legislation that required a public hearing for any rate increase above 10 percent.

Gov. Dannel P. Malloy vetoed the legislation calling it a costly mandate for the Insurance Department.

“The department regularly rejects requests that are not actuarially warranted,” he said in his veto message. “The current process fully protects from excessive and discriminatory rate increases.”

Leonardi, Malloy, and Veltri agreed that the Insurance Department could hold up to four public hearings on proposals to raise rates on individual or small group HMO plans by 15 percent or more.

Veltri, who opposed Anthem’s 19.9 percent increase in 2010 said Tuesday that Anthem’s 12.9 percent increase was in line with what other insurance carriers have requested, but is still a few percentage points higher.

“Other carriers came in at 9.3, 9.74 and 9.95,” Veltri said.

But regardless of the percentage of the increase, Veltri point out all of the increases are significant for consumers still struggling in this economy.

She said what’s interesting about the Anthem filing is the continued shift of policyholders from more comprehensive plans to higher deductible plans.

The move to higher deductible plans “is a disturbing trend as consumers must continue to sacrifice first dollar coverage for high out of pocket expenses before coverage for catastrophic care kicks in,” she added.

Karen Schuessler, director of Citizens for Economic Opportunity, said 12.9 percent is still excessive. She said Anthem seems to be giving the same reasons as it did the last time for the rate increase.

And even though it promised to refund customers if its medical loss ratio fell below the minimum 80 percent level required by the Patient Protection and Affordable Care Act, Schuessler said she doesn’t think it’s a good policy.

She said consumer don’t allow doctors or hairdressers to overcharge them and refund the money at the end of the year.

“Why should we allow an insurance company?” Schuessler said.

John Bryson, an actuary for Anthem’s individual product lines, explained in the filing that the mandated benefit changes required by Connecticut state law contribute to a 0.5 percent increase, increased utilization accounts for about 6.2 percent of the increase and changes to its administrative expenses, plan mix, and medical loss ratio reduced the anticipated increase by 1.5 percent.

“Anthem has worked diligently to decrease the cost of providing healthcare to our members,“ Bryson wrote. “This is reflected in the lower administrative costs per member per month and as a percentage of premiums reflected in this filing.”

“The rate increases in the individual market—as required by actuarial analysis—are not unique to Anthem, but rather represent an economic reality faced throughout the entire industry,“ Anthem said in a statement.

The Insurance Department will review the request and will make a decision on whether it should be granted.

In 2010, then Acting Insurance Commissioner Barbara Spears denied Anthem’s 19.9 percent increase calling it “excessive.”

Anthem’s request to increase rates 12.9 percent was submitted on Aug. 31.