Connecticut residents will get a chance next week to tell Insurance Department regulators what they think about the average double-digit rate increases being proposed by three health insurance companies.
The largest insurance company in the state, Anthem Health Plans, has asked for an average 26.8 percent increase for individual health insurance plans marketed both on and off the state’s health insurance exchange. Anthem covers 56,700 people under their plans in Connecticut.
In its filing with the state, Anthem says medical costs have climbed 9.6 percent, but they also have to take into account the fact that the federal government’s transitional reinsurance program is expiring. Since the inception of the Affordable Care Act, the federal government has provided funds to insurers to offset the costs of “expected high-cost claims for the newly insured.”
The federal government program was established to stabilize premiums in the first three years of the Affordable Care Act.
In addition, Anthem’s proposal eliminates commissions for insurance brokers, who help provide consumers with objective information about which plans is best for them. It’s unclear at the moment if ConnectiCare will continue to pay broker commissions because it’s not detailed in their rate request.
Brokers “are the only resource consumers have to pick the best plan for their needs,” James Wadleigh, Access Health CT CEO, has said.
John Calkins, a member of the Connecticut chapter of the National Association of Health Underwriters, has said while they like to be able to help consumers find the best plan, “brokers have to eat and they have to earn a living.”
He said if one carrier is offering a commission and the other one isn’t, then it sets up a “tenuous set of circumstances.” An estimated 40 percent of the business on the exchange currently comes from brokers.
The public will have a chance at 9 a.m. Wednesday, Aug. 3, to voice their concerns about Anthem’s proposal.
At 9 a.m. Thursday, Aug. 4, the public will get a chance to weigh in on rate hikes proposed by ConnectiCare Benefits and 1 p.m. that same day on Aetna.
ConnectiCare Benefits, which is one of three companies currently offering plans on Connecticut’s insurance exchange, is requesting an average 14.3 percent increase for plans offered on the exchange. ConnectiCare covers 47,597 people under their individual exchange plans.
According to its filing with the Insurance Department, ConnectiCare anticipates a 10.5 percent increase in medical costs. It also cites the expiration of the federal government’s transitional reinsurance program as the main reason for their request to increase rates.
Aetna, which doesn’t participate in Connecticut’s insurance exchange, is requesting an average increase of 27.9 percent for individual policies that it sells to 6,364 residents.
The company anticipated a 9.1 percent increase in medical costs and cited changes to the Affordable Care Act as one of the reasons for the proposed rate hike.
Since filing these rate requests in early June, HealthyCT, which participated in the exchange, was put under an order of supervision by the Insurance Department and prohibited from selling any new policies or renewing the ones it currently offers. HealthyCT had about 11.8 percent of the business on the exchange.
Only Anthem and ConnectiCare will be participating in the exchange in 2017.
All the rate hearings will be held at the Connecticut Insurance Department at 153 Market Street, 7th floor, in Hartford.
Public comment is being accepted in writing too on all of the proposed rate hikes.
John Aloysius Cogan Jr., an associate professor of law at the University of Connecticut, has said that the rate review process is based on a statutory standard.
The Insurance Department’s job is to make sure that the premium covers the claims and doesn’t discriminate against any specific group of clients. Cogan said regardless of whether there’s a public hearing, the Insurance Department’s actuaries will review the rates for all the companies doing business in Connecticut.
That means consumer affordability won’t be considered as part of their review even though it’s likely going to be a topic they hear about at length from the public.
According to state statute, the rates have to be adequate, and they can’t be excessive or unfairly discriminatory. Affordability is not something regulators need to consider.