The state comptroller and attorney general called on Connecticut insurance regulators Monday to reject rate increases requested by insurance companies for health care policies beginning next year.
Both constitutional officers condemned the rate requests during a morning press conference in Hartford ahead of a Tuesday hearing of the Insurance Department to solicit public input on the price hikes.
In July, 10 insurance companies proposed rate increases, including two on the state’s insurance exchange. The requests made by insurers vary by company and market, but average about 8.6% for individual plans and 12.9% on small group plans. The affected plans cover more than 222,000 residents.
Comptroller Kevin Lembo, who pushed unsuccessfully this year for passage of a public health insurance option, called the rate increases “egregious” and “excessive by any objective measure.” He said the request comes as insurance companies have profited through the pandemic due to decreased usage.
“We were unable to pass meaningful healthcare reform or legislation because lawmakers chose not to upset a powerful industry and they chose to do that rather than advocate for their consumers,” Lembo said. “These increases will weaken Connectiucut’s economy and place more of our residents and businesses at risk.”
Attorney General William Tong said many Connecticut residents could not afford to pay for increased rates as they struggle to recover from the ongoing COVID-19 pandemic. He suggested insurance companies should be considering rebates rather than rate hikes.
“Usage of health care services went down in 2020 and so health care and health insurance companies didn’t have to spend money on providing those services. So why did the rates go up and what happened to that money?” Tong said. “What happened to that windfall?”
In a statement, Susan Halpin, executive director of the Connecticut Association of Health Plans, defended the requests saying insurance premiums reflect the underlying cost of health care.
“As high cost drugs come to market, treatments like gene therapy develop, reimbursement rates to doctors and hospitals rise, new legislative mandates are passed, additional taxes and assessments are imposed, and utilization of services goes up, so too will the cost of coverage,” Halpin said. “The unpredictability of COVID adds an additional layer of complexity.”
The Insurance Department’s hearing will take place Tuesday from 9 a.m. to noon and will be conducted virtually via Microsoft Teams. The deadline for signing up to testify passed on Friday and by Monday, some residents had submitted written testimony to the department.
“As a mother of three kids, ages 9, 12, and 14, we simply cannot afford these healthcare hikes,” a respondent named Nicole Salvatore wrote. “The cost growth is out of control and my insurance premium is now more expensive than a monthly mortgage payment.”
Meanwhile, Danbury resident James Root also urged the agency to deny the request for increases.
“I will be adversely affected by any health insurance premium rate increase. Considering the current high rates of profit in health insurance, and the difficult times among the general state population and small businesses (in addition to my own situation), please do not grant the premium rate increases applied for by the major health insurers at this time,” Root wrote. “To do so is unwarranted and would be harmful.”
During the press conference, state Healthcare Advocate Ted Doolittle said the Insurance Department’s rate review process was Connecticut’s best tool for holding insurance companies accountable for their rates.
“Tomorrow, the insurance rate hearing is the primary and best tool that we have right now,” he said.
Lembo urged regulators to expand their staff if needed and dig deep into the request from insurers to determine why they required an increase in rates. For state employee plans, Lembo said his office negotiated “the best prices in the nation” for prescription drugs.
“What do my prices look like compared to what Aetna, in this case, is paying CVS for drugs? Are they higher? Are they lower? If they’re higher, why? They’re the same company,” Lembo said. “That makes no sense whatsoever — unless, it’s a way to shelter health care costs between one owned subsidy and another.”
Halpin, the insurance plan lobbyist, said it was not a fair comparison.
“Comparing the state employee plan to the individual and small group markets is like comparing apples to oranges,” she said. “The key to lower premiums is in all stakeholders working together to lower the actual cost of health care.”
In a press release, Senate Republican Leader Kevin Kelly and Sen. Tony Hwang, R-Fairfield, opposed the public option in favor of their own plan.
“The comptroller’s ‘solution’ is not ‘bold’ or ‘courageous.’ It is a government-run public option modeled on a program that has run in deficit and that is still a far cry from being affordable for most families,” the Republicans said. “It’s a ‘solution’ that would threaten tens of thousands of middle class jobs in our flagship industry, that would do nothing to make health care more affordable for the vast majority of people.”