HARTFORD, CT — Ten health insurance companies, including two offering health insurance plans both on and off the exchange, proposed an average 7.8% increase in rates for 2020.
Anthem Health Plans, Inc., which is one of the two companies competing for business on the state health insurance exchange, proposed a 15.2% increase in individual health plans mostly because of a 9.3% increase in medical cost trends and the reinstatement of the federally mandated health insurer tax. Anthem served approximately 27,300 members last year.
ConnectiCare Benefits, Inc., which serves about 75,600 consumers, proposed an average 4.9% increase in its rates. It also attributed the increase to a 9.3% increase in medical cost trends.
In its filing ConnectiCare Benefits also explained that several new state-mandated benefits, such as coverage of prosthetics, over-the-counter contraceptives, mammograms, and pregnancy as a qualifying event contributed to the increase.
The lack of an individual mandate penalty for not having insurance is also contributing to an increase in costs.
“The elimination of the penalties does not technically remove the requirement to obtain healthcare coverage,” Sarah Mu, the director of Actuarial Services for ConnectiCare Benefits, wrote in the filing. “But without penalties there will be no enforcement and, in effect, no practical mandate to obtain coverage for 2019 and later years. Without such a mandate, individuals — typically younger and healthier — do not participate in the insurance pool to the extent they would if the mandate were in force. This lack of participation increases the cost of the insurance pool.”
Tu Nguyen, Anthem’s actuary, said the essential benefit coverage package the state passed in 2018 is adding $2.11 per member, per month to premiums. The legislation mandating coverage of prosthetics is adding about 15 cents per member, per month in premium costs.
Both companies cited the reinstatement of the federally mandated health insurer tax as a reason for an increase in the rates. The reinstatement of this tax accounts for approximately 3 percentage points of each carrier’s rate increase request.
ConnectiCare Benefits also reserved its right to leave the health insurance exchange.
“In light of ongoing legislative efforts at the state and federal level, as well as the ongoing litigation over CSR payments, the federal and state regulatory environment has been and remains fluid. Given the uncertainties of the current regulatory environment, CBI reserves the right to withdraw its products from the individual market or request a change to all, or any portion of these rate filings,” Mu said. “If it determines, in its sole discretion that a change in the regulatory environment is likely to pose an actual or potential material adverse risk to CBI’s business.”
There are more than 111,000 Connecticut residents who purchase their insurance through the exchange, which is called Access Health CT.
Another 131,000 consumers purchase health insurance plans off the exchange or through the small group marketplace.
In total there were 10 insurance companies that submitted 14 rate filings for various plans Friday.
The Insurance Department will review the rate requests and hold an informational public hearing at 9 a.m. Wednesday, Sept. 4. The public will have an opportunity to address plans offered in both the individual and small group marketplace.
However, the public is likely to be disappointed again that affordability for consumers is not part of the considerations in the rate-setting process in Connecticut.
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. According to state statute, 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.
In 2019, Anthem Health Plans had proposed a 9.1% rate increase for their 2019 plans. The department opted instead for a 2.7% premium reduction. ConnectiCare’s average rate increase was dropped from 13% to 4%. However, the range of rate increases for Anthem was between 7.2% and 31%, and the range of rate changes approved for ConnectiCare was a rate reduction of 18% up to a rate increase of 8.5%.
Companies participating in the small group market are also proposing increases in their rates.
Oxford Health Plans, which covers 40,000 people in the small group market, proposed an increase of 14.9%.
Anthem Health Plans has proposed a 14.8% increase for its small group market customers, ConnectiCare is requesting an average 2.9% and 3.3% increase for plans sold off the exchange in the small group market, and Harvard Pilgrim Health Care is requesting a 10.8% increase for its small group market customers. UnitedHealthcare Insurance is requesting a 14.3% increase for its small group market customers.
More information on the rate requests is available on the Insurance Department’s website.