The head of Connecticut’s insurance exchange warned board members last week that insurance companies are losing money in the individual marketplace.
“This is of great concern to the state-based marketplaces,” Access Health CT CEO James Wadleigh said last week.
He said many of the carriers are operating with a medical loss ratio of 90 percent, which is an indicator that “rates will need to rise.”
Most carriers were allowed to increase their rates this year after they were reviewed by the Insurance Department.
In order to save money, insurance carriers are eliminating commissions for brokers selling individual business on the exchange, according to Wadleigh. More than 40 percent of this year’s enrollees used a broker to sign up for a plan.
“Losing brokers as key sales and support teams will force Access Health to fill those roles with new staff and have the potential to increase our assessment rate,” Wadleigh said. “It is an issue we will need to address this year.”
As of last Tuesday, 108,830 Connecticut residents had signed up for private insurance through the exchange.
About 55,349 of those enrollees will receive some type of subsidy and have incomes low enough to receive discounted premiums. Another 29,290 will receive a subsidy because their income is below 400 percent of the federal poverty level and 24,191 will receive no subsidy.
About 30 percent of those who have signed up still need to verify their income by submitting documents to Access Health CT. Enrollees have 90 days to verify — through documentation — that the financial information they reported in their application is accurate.
About 238,178 individuals, who have signed up during the open enrollment period, have incomes below 185 percent of the federal poverty level and qualify for Medicaid.
Open enrollment in the program runs through Jan. 31.
Residents who fail to obtain insurance will have to pay a penalty this year of $695, or 2.5 percent of their household income, whichever is greater.