HARTFORD, CT — Connecticut’s Insurance Department knocked down the average health insurance rate increase insurance companies wanted for customers purchasing plans in the individual and small group market in 2021.
Proposed price increases for plans in the individual market were decreased from 6.29% to 0.01% and small group plans went from an average increase of 11.28% to 4.1%. The total amount of money 214,600 Connecticut consumers will save as a result is $96 million, according to Insurance Commissioner Andrew Mais.
“Working on behalf of consumers, the department was able to reduce the health insurance rate increase requests thanks to the hard work of our actuaries and professional staff,” Mais said. “I will continue to work collaboratively with all stakeholders to find long-term solutions while continuing to promote access and eliminate barriers to coverage here in Connecticut.”
Sen. Matt Lesser, D-Middletown, who co-chairs the Insurance and Real Estate Committee, applauded the Insurance Department for rejecting the higher rates proposed by insurance carriers.
“While it’s positive that rates on individual plans aren’t increasing, Connecticut can and should take immediate action to lower health care premiums by following the lead of states like New Jersey and Massachusetts that have strengthened the Affordable Care Act even as they lay the groundwork for more aggressive reforms,” Lesser said. “Immediate reforms could include expanding Medicaid and providing state level premium support for plans on Access Health, Connecticut’s health insurance marketplace, and could lower health insurance costs by 20% or more.”
The two insurance carriers offering plans through Access Health CT, which is Connecticut’s insurance exchange, are Anthem Health Benefits and ConnectiCare.
The average rate increase for the 22,071 customers covered by Anthem Health Plans was slashed from 9.9% to 1.9% and the average increase for 75,174 ConnectiCare customers was cut from 5.5% to -0.1%.
Regulators were able to decrease the proposed rates mostly by looking at the medical trend.
The medical trend is the rising health care costs, including the cost of prescription drugs, and the increased demand for medical services. It was projected by the insurance carriers to grow at approximately 8.8% for 2020 and 2021.
The Insurance Department felt insured consumers used fewer medical services due to COVID-19 in the first half of the year so they were able to reduce some of that during the rate-setting process.
According to the final decision, regulators felt Anthem’s medical trend over a 24-month period was “excessive” and they reduced it to 3.5% for 12 months and 7.7% for the following 12 months. The decrease “reflects the suppression of utilization due to COVID in 2020 experience,” regulators wrote in their decision.
An Anthem spokeswoman said, “Rates are based on what medical costs are anticipated to be a year from now, which is made more challenging given the still evolving COVID-19 pandemic. We are working to evaluate the impact of this decision during this time of unprecedented uncertainty.”
ConnectiCare also saw regulators decrease their medical trend estimate from an average annual 8.9% to 7.25% over a 24-month period. The decrease, according to regulators, “reflects the suppression of 2020 utilization.”
Kim Kann, a spokeswoman for ConnectiCare, said they are mindful of the impact any rate increase has on its policyholders, especially those who are not eligible for federal subsidies.
“We do, however, respectfully disagree with CID’s reduction in our requested rates,” Kann said. “We believe that COVID-19 costs will rise through the rest of 2020 and in 2021 due to increased testing, new vaccines, and other related expenses. CID did not allow us to factor those projected costs into our rates.”
Kann said health insurance is expensive because health care is expensive.
“Health insurance premiums will continue to escalate if the cost of care is not addressed,” she added.
Open enrollment for 2021 through Access Health CT begins Nov. 1.