HARTFORD, CT — Two insurance companies are proposing an average rate hike of 12.3 percent for health plans sold to individuals on Connecticut’s insurance exchange.
That’s lower than the average rate hike of 31.7 percent and 27.7 percent this year for Anthem Health Plans and ConnectiCare Benefit customers, but it’s still in the double digits.
Medical costs and uncertainty in Washington regarding regulations for non-compliant Affordable Care Act plans are driving the rate increases, according to Insurance Commissioner Katharine Wade.
“The proposed increases are lower than last year, but rising medical costs continue to be the key drivers of health insurance premium rate increase requests,” Wade said. “Of concern, however, is the ongoing uncertainty in Washington that threatens to destabilize the health insurance markets, particularly for individuals. The Department is pressing for clarity and guidance from the federal government so that we can finalize the rates for 2019.”
Wade said there’s a concern that new federal regulations regarding Association Health Plans and short-duration health plans will shrink the pool of individuals participating in the individual exchange.
ConnectiCare Benefits, which currently covers 63,000 people under individual market policies, said rising medical costs and a demand for services is driving its proposed 13 percent average rate increase.
There’s also a concern about the limitation of the individual mandate and what it means for the typically younger and healthier people who would participate.
Changes the legislature made this year about what needs to be covered in Connecticut under these plans is also increasing premiums.
“The new State mandatory benefits required for 2019 include prosthetics, over-the-counter contraceptives, pregnancy as qualifying event, and mammograms. They are included in the premium rates due to the uncertainty of state funding,” Sarah Mu, an actuary with ConnectiCare, said in a cover letter to the Insurance Department.
Rep. Sean Scanlon, who co-chairs the legislature’s Insurance and Real Estate Committee, said he believes the rate increases are more directly tied to the uncertainty in Washington as Wade pointed out in her statement.
“I take her at her word,” Scanlon said.
He added that “at a time when we should be working together to lower the cost of insurance and health care, President Trump’s recent decisions to end the individual mandate, end cost sharing reduction payments, and suspend risk adjustment payments are all having the opposite effect of actually increasing premiums.”
He said a CEO of an insurance company recently told him he hired people just to monitor social media, including the president’s Twitter feed, in case the company has to respond.
Gov. Dannel P. Malloy sought to place the blame on Washington, too.
“Next year, over a hundred thousand Connecticut residents will pay more for insurance because the president and his Republican allies in Washington have relentlessly and pointlessly attacked the Affordable Care Act, causing uncertainty in the healthcare exchange marketplace and increasing insurance premiums,” Malloy said.
Frances Padilla, president of the Universal Healthcare Foundation, said the increases would have been lower “if there was not uncertainty in Washington.”
Anthem Health Plans is requesting an average 9.1 percent increase in its rates both on and off the exchange for its 45,500 customers.
It says the rate increase is necessary to address increasing medical costs and an increase in the number of customers using the services.
The two companies also requested increases for customers in its small group market, which are plans for employers with 50 or fewer workers.
Anthem Health Plans has proposed a 9.9 percent average rate increase for its small group plans both on and off the exchange and CTCare Benefits is requesting an average 5.7 percent increase for its exchange plans. CTCare Inc. and CTCare Insurance Co. are proposing 11.9 percent and 14.7 percent respective average rate increases.
More than 114,000 individuals signed up for coverage through the exchange, Access Health CT, in 2018. It was a 2.3 percent increase over 2017.
There are currently 99,655 individuals still paying for plans on the exchange as of today. More than 73,000 are receiving tax credits and subsidies, while 26,500 are paying the full price without any help from the government.
In 2018, Connecticut’s insurance regulators decided to allow two carriers to boost their premiums for plans on the individual market in 2018 by an average of 31.7 percent for Anthem and 27.7 percent for ConnectiCare Benefit customers.
The increases assumed that Cost Sharing Reduction (CSR) payments — which go to insurance companies to offset deductibles and co-insurance for lower income individuals — wouldn’t continue. The CSR payments were discontinued last year.
But that actually increased the amount of tax subsidies those who have incomes below 400 percent of the federal poverty level would receive. What that means is families who aren’t subsidized will shoulder the bulk of the increases.
Even though Congress failed to repeal the law, the future of the Affordable Care Act is still in doubt.
The elimination of the individual mandate and other changes by the Trump administration, in addition to the lack of action by Congress, has caused a lot of uncertainty in the marketplace.
In some cases states are stepping into the void.
New Jersey recently joined Massachusetts in requiring its citizens to purchase health insurance.
But health insurance premiums are still on the rise in most states.
California announced its premiums would rise about 9 percent on average and roughly 6 percent of that is attributed to the loss of the individual mandate. The 9 percent hike will hurt unsubsidized families.
The Congressional Budget office estimated earlier this year that premiums would increase on average by 15 percent.
The Connecticut Insurance Department will conduct an actuarial review of the rate filings and determine if they are justified. The 30-day comment period starts today and comments can be filed online or delivered to the Connecticut Insurance Department, P.O. Box 816, Hartford, CT 06142-0816.
Informational hearings regarding the rate filings will be held at 10 a.m. Sept. 5 at the Insurance Department.