No one except executives from Anthem Health Plans defended the insurer’s request for a double-digit rate increase Wednesday during an Insurance Department public hearing.
Two lawmakers, two insurance brokers, and 13 consumers said they opposed the rate increases and added that in the future insurance regulators should be able to reject these “unfair” and “unaffordable” rate increases based on affordability.
Currently, the Insurance Department is only able to review the proposed rate hikes based on certain criteria. The rates have to be adequate and they can’t be excessive or unfairly discriminatory, according to state statute.
Lynne Ide of the Universal Health Care Foundation of Connecticut said they solicited responses from 500 consumers who feel the double-digit rate increases are outrageous and insurance regulators should consider the financial impact on consumers.
“Unaffordable health insurance is a more expensive version of being uninsured,” Ide said.
She said if health insurance premiums, co-pays, and deductibles are too high then “you’re not going to use it.”
She said she understands it’s not part of the Insurance Department’s charge to consider affordability. However, she wondered why then should they even hold public hearings.
Sen. Tony Hwang, R-Fairfield, said he understands the Affordable Care Act had noble intentions to provide care and access to all, but it’s simply not working and rates continue to increase.
“The Affordable Care Act is absolutely unaffordable,” Hwang said.
Gaye Hyre, who is a cancer survivor, told Insurance regulators that the deductible only looks affordable because only certain tests or medication count toward that deductible. And the bar seems to keep moving on consumers. She said she had been paying $5 for a medication and now it’s $35.
Douglas Wade, of Wade’s Dairy in Bridgeport, said other than going for an annual physical his employees can’t afford the deductible.
Wade said his company pays his employees premiums, but his employees can’t afford to use the plans because of the high deductible.
“In addition to the complex set of regulations and penalties, we are continuously faced with escalating health insurance premiums — 28 percent is just off the charts and unacceptable,” Wade said. “We need a truly affordable healthcare plan.”
The rate increases requested by Anthem vary from 16.5 percent to a high of 39.8 percent. The average is 26.8 percent.
Matthew McDermott, chief organizer with Congregations Organized for a New Connecticut (CONECT), said the high cost of insurance will cause consumers to lose their insurance and the market that regulators are trying to regulate will fail.
McDermott said he doesn’t believe Anthem’s claim that the reason it has to increase rates is because it’s losing its reinsurance from the federal government under the Affordable Care.
“That’s the way it’s always been designed,” McDermott said. “Insurance companies have known that from the start.”
Anthem said in its filing that one of the reasons for the rate increase was the expiration of the federal government’s transitional reinsurance program to offset the costs from the expected high-cost claims for the newly insured.
Other reasons include increases in medical costs, changes in pharmacy costs, and a correction to the 2016 rates.
James Augur, Anthem’s regional vice-president of sales, said that it’s unfortunate that “health care costs have been higher than expected, impacting the financial solvency of some carriers while causing others to exit the exchange.”
He said even though the rate increases are higher “than we would like, the 2017 rate is actuarially sound and adequate under the law, and it will enable Anthem to maintain its commitment to the individual market.”
Paul Lombardo, the Insurance Department’s actuary, asked Anthem for more information about why they are using the experience of Hepatitis C drugs to boost rates when it should have already been accounted for in the 2015 experience.
Tu Nguyen, Anthem’s actuary, said they continue to see high utilization of the expensive Hepatitis C drug.
Overall, Nguyen said they failed to price their 2016 rates at an adequate level. He said he doesn’t believe that’s unique to Anthem. However, they do expect to be losing sicker people and gaining healthier people, which will help lower the risk.
But at this moment, “we do anticipate that our members today have a higher risk than the market average,” Nguyen said.
Without naming the company, Anthem anticipates it will pick up at least some of the HealthyCT customers who will be searching for a new insurer before the end of the year. The Insurance Department put HealthyCT under an order of supervision in July.
Insurance Department Commissioner Katharine Wade has said the fiscal health of HealthyCT was jeopardized by a federal requirement that will force it to pay $13.4 million to the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services as part of the ACA’s risk adjustment program.
HealthyCT had 40,000 customers both on and off the exchange. Those customers on the exchange will have to choose between Anthem and ConnectiCare, the only two companies participating in the exchange.
Wade sat in the back of the room and listened to the first part of the public hearing Wednesday. She had left before Tom Swan, executive director of the Connecticut Citizens Action Group, said the proposed rate increases are a “ruse to try and make the insurance commissioner to look somewhat ethical” at a time when she refused to recuse herself from regulating the Anthem-Cigna merger, which the U.S. Department of Justice is attempting to block. He was interrupted several times by the hearing officer who said Swan’s comments were not related to the proposed increase.
Swan said anything less than a 10 percent reduction in the requested rate hike will be “viewed through the prism of what the public perceives as a corrupt Insurance Department.”
He said Anthem doesn’t need the money it’s going to get from this rate increase.
Over the past several years the Insurance Department has lowered requests for rate increases for most proposed plans.
The public hearings will continue at 9 a.m. Thursday, Aug. 4. The public will get a chance to weigh in on the rate hikes proposed by ConnectiCare Benefits at 9 a.m. and the Aetna rate increase at 1 p.m.