Courtesy of the foundation
Frances Padilla, president of the Universal Health Care Foundation (Courtesy of the foundation)

HARTFORD, CT — For the past three years, the rate request hearings at the Insurance Department have followed a tight script starting with commentary from the public followed by comments from the insurance company.

On Wednesday morning 10 members of the public testified against Anthem’s proposed rate increase, but healthcare advocates from one leading organization declined to participate.

Anthem Health Plans and ConnectiCare Benefits defended their requests for double-digit rate hikes for 2018 during separate Insurance Department hearings Wednesday, but the Universal Health Care Foundation of Connecticut announced on the eve of the hearings that they wouldn’t testify.

Anthem Health requested an average 33.8 percent increase for individual health insurance plans both on and off the exchange. That means about 35,000 customers have rate increases from between 19 percent to 52 percent.

ConnectiCare Benefits has asked for a 15.2 percent average rate hike for its 51,000 individual market customers on the exchange. The rate increases range from 8.4 percent to 18.7 percent.

“We believe the state’s approach to the health insurance rate review process is unwelcoming of real public participation and too narrow in its scope, failing to truly grapple with the rising health care costs facing both consumers and payers,” Frances G. Padilla, president of the foundation, said. “The timing of the hearing is also unfortunate, given the attacks on the Affordable Care Act occurring right now.”

The Insurance Department doesn’t have to hold public hearings on rate requests. The hearings are held at the discretion of the insurance commissioner.

Rating hearings were held by the department in 2010 , 2014 , 2015 , and 2016 .

Public pressure and increases in health insurance premiums under the Affordable Care Act played a role in allowing for the hearings, but the decision to hold them lies with Insurance Department Commissioner Katharine Wade.

In a letter to the Universal Health Care Foundation Wade said she hears the frustration about the rising insurance rates.

“Consumer protection is the prime mission of the Insurance Department and as regulators we work with public, private and nonprofit stakeholders to address the key drivers of health insurance – medical costs,” Wade wrote in a May 30 letter. “This is why I have always believed that these hearings are important to give consumers a forum and require carriers to provide a public accounting of the reasons behind their rate requests. And although health insurance rate hearings are not mandated by statute, I have held them every year since becoming commissioner in 2015.”

Courtesy of CT-N
Anthem executives testify Wednesday at the Insurance Department hearing (Courtesy of CT-N)

However, advocates complained its an exercise in futility because the regulations the department must apply to the rate requests is inadequate. That’s because it doesn’t allow regulators to consider consumer affordability.

The Insurance Department’s job is to make sure that the premium covers the claims and it doesn’t discriminate against any specific group of clients.

The rates have to be adequate, and they can’t be excessive or unfairly discriminatory, but beyond that there’s little regulators can do to reign in costs for consumers.

The Universal Health Care Foundation said It has asked for the state to adopt consumer affordability standards in response to the Insurance Department’s stance that it is by statute only required to evaluate requests to increase premium rates relative to their impact on insurance carrier solvency. 

In February 2017, the Insurance Department submitted testimony in opposition to proposed legislation to adopt consumer affordability standards.

The legislation, submitted by Senate President Martin Looney, D-New Haven, asked the Insurance Department to add affordability to the list of things it considers when setting the rates. The bill had a public hearing but never received a vote from the committee.

“If premiums are set at what would be deemed excessive rates for those with higher incomes to subsidize premiums that would be deemed inadequate for those with lower incomes, this would violate current rating requirement under the ACA. Setting inadequate rates would violate actuarial standards and rating laws and threaten carrier solvency,” the department wrote in testimony. “This is not in the best interest of consumers.”

The Universal Health Care Foundation said it understands the department is required to ensure the fiscal solvency of insurers via their rates.

“We also understand that rate increases, especially double-digit increases, make purchasing a health insurance plan for consumers a financial struggle, and threatens the fiscal solvency of many households,” the foundation said. “But while insurers have other products, investments, and streams of revenue to turn to, the consumer must rely on state regulators to protect them.”

They said it’s not reason enough to shy away from creating more affordable options.

“Unaffordable health insurance is a more expensive version of being uninsured,” they said.

There’s also a lot of unknowns for consumers and insurance carriers alike as Congress seeks to repeal and replace the Affordable Care Act.

One of the consumers who testified Wednesday suggested the Insurance Department hold the hearing open until the U.S. Senate decides whether to move forward with repealing and replacing the ACA.

“If the law changes we will address those changes accordingly,” Donna Tommelleo, a spokeswoman for the Insurance Department, said.