HARTFORD, CT — Insurance Commissioner Katharine Wade reduced the average rate increases proposed by two private health insurance companies from 12.3 percent to 2.72 percent Thursday.
Anthem Health Plans had proposed a 9.1 percent rate increase for their 2019 plans. The department opted instead for a 2.7 percent premium reduction. ConnectiCare’s average rate increase was dropped from 13 percent to 4 percent. However, depending on which plan an individual chooses, there are still a wide range of offerings. The range of rate increases for Anthem is between 7.2 percent and 31 percent, and the range of rate changes approved for ConnectiCare is a rate reduction of 18 percent up to a rate increase of 8.5 percent.
Anthem Health Plans currently insures 45,500 individuals, and ConnectiCare insures 63,693 individuals.
The cost of medical services is what is driving the rate increases, according to Wade.
“Medical trend — the cost of medical services and the demand for those services — continues to be the main cost driver and we need to work with all stakeholders to reduce the cost of health care, which drives increases in health insurance premiums,” Wade said. “For the first time there will be more choice of innovative networks and plan cost-sharing options for consumers on the exchange.”
Wade said that in addition to the medical trend of cost increases of approximately 8 percent, carriers also accounted for the cost of new state mandates and adding pregnancy as a qualifying event to enroll in health insurance in the individual market.
For plans that are offered on the exchange by Access Health CT, there will be a number of new options.
Wade said that in order to keep costs down they worked with Access Health CT’s board to provide more plan designs than in previous years.
“Providing greater choice to consumers is important so they can choose a plan that best meets their individual and family needs,” Wade said.
Other factors Wade took into consideration when finalizing the 2019 rates included what she felt would be the “limited impact from the lack of enforcement of the Affordable Care Act’s individual mandate.”
“While the federal government officially removed the individual mandate penalty for 2019, the Department and carriers accounted for this in the 2018 rates,” Wade said.
And the Insurance Department determined there would only be a “marginal impact” from the federal government’s new regulations for short-term, limited-duration health plans and association health plans.
Wade also approved an average 3.14 percent increase for small group plans — a reduction from the requested average rate increase of just over 10 percent.
Anthem Health Plans had requested a 9.9 percent increase but will receive a 2.9 percent increase for the 67,600 small group plan members. CTCare Benefits Inc. requested a 5.7 percent rate increase but will receive no increase — rates will remain flat for the 100 members enrolled in its small group plan.
The Insurance Department’s job is to make sure that the premiums cover the claims and that there is no discrimination 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.
At a Sept. 5 public hearing, consumers opined that affordability of health insurance should be a factor that the Insurance Department considers in its rate reviews. The General Assembly has failed to pass legislation that would require affordability to be part of the rate review process, even after last year’s double-digit rate hikes.
Last year the Insurance Department approved average rate increases of 31.7 percent and 27.7 percent.
That was mostly due to the federal government’s decision to eliminate the cost-sharing reduction (CSR) payments to insurers.
The two insurance carriers received about $50 million a year in CSRs for 46,000 of the 98,000 exchange customers. About 25 percent of the 98,000 exchange customers receive advanced premium tax credits and 25 percent receive no financial assistance.