Christine Stuart photo
Jill Zorn of the Universal Health Care Foundation testifies against rate hike (Christine Stuart photo)

Consumers and advocates asked the Insurance Department on Friday morning to deny Anthem Blue Cross and Blue Shield’s proposed double-digit rate increase.

The insurance company is requesting an average 12.5 percent rate increase for its health insurance plans offered both on and off Connecticut’s health insurance exchange, Access Health CT. Anthem officials said that it needs to increase its rates because of the rising costs of medical care and pharmaceuticals, and a reduction in federal funding.

Jill Zorn, the senior program officer at the Universal Health Care Foundation of Connecticut, pointed out that maybe 9 a.m. on a Friday wasn’t the best time to hold the public hearing.

There are 66,200 Connecticut policyholders who could be impacted by the increase, but only six, including Zorn, attended the hearing to speak about the increase.

“We contacted thousand of individuals in our network, many had no confidence that they could do anything to impact the process. And more importantly, few if any, were available to show up to testify in Hartford at 9 a.m. on a Friday morning.”

There were 136 written public comments submitted to the Insurance Department. In 2010, the last time there was a public hearing on a double-digit rate increase, protesters showed up with signs and delayed the start of the hearing. Friday’s hearing was much more subdued.

Elizabeth Keenan of New Haven and a representative of Congregations Organized for a New Connecticut, said that Anthem has the largest market share on the exchange and there’s very little pressure to change rates based on a lack of competition.

“We do not want Anthem rate increases on the backs of Connecticut taxpayers,” Keenan said. “We urge the Commissioner to deny Anthem’s exorbitant rate increases.”

Arvind Shaw, chief executive officer of Generations Family Health Center, said that of the 290 claims his health center has made on behalf of patients Anthem has only reimbursed one correctly. He said in verifying the insurance status of their patients they were often told those who were covered by Anthem had their plans canceled “pending investigation.”

A large number of those patients started showing up in May, Shaw told the Insurance Department hearing officer. He said they were told the patient was unenrolled because they had not paid their premium.

“I am very concerned for the safety and the care of these patients,” Shaw said.

Arleen and Marc Sandy Block testified on behalf of their 26-year-old son, who could not attend the hearing because he was working. Arlene Block said her son qualifies for Medicaid, but there were no specialists near their home who accepted Medicaid. She said he purchased a plan with Anthem and paid the full amount, but has struggled to make it work.

She said her son made his first payment in December for coverage to start in January, but then was told the payment was never processed and he would have to make another payment. Then he needed a preauthorization for a drug he’s taken since he was seven years old.

“Communication inefficiencies and incompetence,” Block said expressing her frustration with communicating with the company. She said she needed to get authorization on behalf of her son to continue the conversations with Anthem because of the lengthy amount of time her son had to spend on hold during hours he is scheduled to work.

Christine Stuart photo
Left to right: Anthem’s attorney Michael Durham, its actuary Michael Bears, Jim Augur, vice president of sales, and John Russo, Anthem’s legal counsel (Christine Stuart photo)

Jim Augur, vice president of sales for Anthem, said the company “strives to deliver the best customer service in Connecticut and clearly we experienced unprecedented changes over the last several months. Our goal is to deliver the service our members expect.”

Anthem, according to its filing with the Insurance Department, “anticipates a ‘pent-up’ demand for health services in 2015, the second full year of the Affordable Care Act, and higher morbidity — the influx of previously uninsured into insured risk pools.” The company cited a Centers for Disease Control study on the health status of insurance and uninsured populations as the basis for its conclusion.

It also noted that “other factors affecting rates are taxes and fees, changes in benefit design, particularly on the pharmacy side.” One specific cost impact is coverage for a pricey new drug called Sovaldi, which is used to treat Hepatitis C.

Richard Cozart, of New Fairfield, is an Anthem policyholder whose rate is expected to increase 7.4 percent under the current proposal. He said he has difficulty understanding the reasoning because it fails to adequately disclose the factors that led to this determination other than describing that it is based on application of its internal risk score data.

It also argues that pent-up demand will increase utilization by the previously uninsured.

“Again, there appears to be no objective evidence to support this claim which seems to rely implicitly upon a flood in 2015 of the formerly uninsured into the market,” Cozart said. “This assumption ignores that the individual mandate became effective in 2014 when an influx would be reasonable.”

Paul Lombardo, a hearing officer for the Insurance Department, wondered why there would be an influx of individuals who weren’t in the market in 2014 entering in 2015?

Michael Bears, Anthem’s actuary, said the penalty for failing to have health insurance will be higher in 2015 and 2016.

Another reason for the rate hike is expensive new Hepatitis C drugs.

Bears estimated that about 600 of its approximately 66,000 policyholders may be diagnosed with Hepatitis C, and with the drug costing $30,000 a month to treat one patient, at least one percentage point of the rate increase is attributed to the cost of new Hepatitis C drugs.

Anthem was asked to provide additional information to the Insurance Department before July 3.

Insurance Commissioner Thomas Leonardi is expected to issue a decision on the requested rate hike in 30 days.