The Connecticut Citizen Action Group updated its report on insurance company profits in anticipation of Monday’s hearing on the double-digit rate hikes proposed by health insurance companies in the individual and small group marketplace.
The report found that five of the companies looking to increase premium rates on consumers in 2023 saw billions of dollars in profits, stock buybacks, and executive compensation.
“As the state considers these requested rate hikes, it is important to look at what insurance companies are doing with the dollars they collect from Connecticut residents,” Tom Swan, executive director of the Connecticut Citizen Action Group, said. “Their greed is appalling. The health and well-being of their subscribers and of Connecticut residents is the last thing from their mind.”
The report found that Anthem saw $6.1 billion, CIGNA saw $5.36 billion, CVS, which is the parent company of Aetna, saw $7.9 billion, and UnitedHealth saw $17.3 billion in profits in 2021.
Anthem has bought back $1.9 billion, CIGNA $.7.4 billion and United Health has bought back $3.6 billion in stock, while their CEO’s were generously compensated. Anthem’s CEO saw $33 million in compensation, CIGNA’s CEO saw $91.1 million, CVS’s CEO saw $17.3 million and UnitedHealth saw $26.5 million.
All the companies looking to hike rates on consumers for plans that start in 2023 said they need to increase their rates because the cost of providing medical care has increased. They also cited the elimination of the enhanced federal funds for subsidies for individuals who participate in plans offered through Access Health CT.
Insurance regulators are only responsible for making sure the premium requests are able to address the cost of claims. It does not account for the profits made by insurance companies, the affordability of plans for consumers, or the cost of delivering health care which is rising across the country.
U.S. Sen. Richard Blumenthal is holding a press conference today at 10 a.m. to argue that the Inflation Reduction Act, which continues to fund those federal subsidies and is expected to be passed by the U.S. House today, eliminates the need for some of the increase. Because of the elimination of about $85 million in additional subsidies companies expected consumers to leave the marketplace.
A public hearing on the proposed rate increases will be held at 9 a.m. Monday at the Legislative Office Building and virtually.
ConnectiCare Benefits is proposing an average 24.1% increase for its individual plans offered on the exchange.
The company argues it’s because the demand for services has increased. That factor is expected to have a projected impact of 12.1% on the insurer’s claims costs, according to their filing. They also point out the subsidies offered under the American Rescue Plan Act put in place in 2021 are expected to go away in 2023. They say they expect fewer customers to be qualified for the advanced premium tax credit and they expect consumers will leave the individual marketplace.
As a result of the departure of customers, the insurance company expects the average morbidity of the risk pool to go up and lead to an unfavorable impact on the 2023 rates.
More than 75,000 individuals are now covered by that plan. The company is also requesting a 23.6% increase for its individual plans marketed outside the exchange. The company is also requesting a 22.9% increase for its on-exchange small business plans and a 24.5% increase for small group plans marketed outside Access Health CT.
Anthem Health Benefits, the other insurer that offers plans on Connecticut’s exchange, is asking for an average 8.6% increase for its on-exchange individual plans.
The company says about 9.2% of that increase can be attributed to medical cost inflation, provider contracting changes, and an increase in demand for those medical services. The plan currently covers about 27,698 individuals.
Anthem is requesting an average increase of 3.6% on small group health plans for employers with 50 or fewer workers.
Cigna Health and Life Insurance Company filed a request to increase rates an average of 19.64% on small group policies. Oxford Health Insurance requested a 13.4% increase for health plans used by 50 or fewer workers and a 15.7% increase for HMO plans used by 50 or fewer workers.
UnitedHealthCare Insurance company requested an average rate increase of 13.9% for small group plans. And Aetna Life Insurance Co. submitted a rate filing for an increase of 14.1% for small group indemnity plans that provide major medical and prescription drug coverage for employers with 50 or fewer workers.