Insurance rate hikes are okay, but not as big as carriers wanted
Connecticut consumers will see higher rates on many health insurance plans next year, but not as many as insurance companies had hoped.
The State Department of Insurance approved an average rate increase of 5.6% for individual health plans in 2022. Carriers had requested an average increase of 8.6%.
For small group contracts, the insurance department authorized an average rate hike of 6.7%. Insurers had requested 12.9%.
State Insurance Commissioner Andrew Mais said on Friday his department saved consumers a collective $ 76 million next year by approving smaller rate hikes.
“By working on behalf of consumers, the department has been able to reduce demands for increased health insurance rates … but we must work to deal with the skyrocketing health care costs that these premiums cover,” he said. he said in a press release. “The unit cost of inpatient and outpatient care has historically increased by around 10% per year. The prices of prescription drugs have increased further. I will continue to work with all stakeholders to find long-term solutions that promote access and remove barriers to coverage here in Connecticut.
Anthem Health Plans and ConnectiCare Benefits Inc., which sell individual and small group policies on the state’s affordable care exchange, Access Health CT, have both called for higher rates.
Anthem has requested an average increase of 12.3% for individual plans that cover 28,071 people. The insurance department has approved an average increase of 5.8% (increases range from -0.55% to 15.61%, depending on the plan).
Anthem also proposed an 11.5% average rate hike on breakout policies that cover 25,529 people. The state signed 2.9%.
ConnectiCare requested an average increase of 7.4% for individual plans that support 81,852 residents. The state authorized 5.5% (increases range from -0.6% to 14.8% depending on the plan).
The company also suggested an average increase of 13.6% on breakout policies. The state approved 10.3%.
Ten insurers also sell policies on the stock exchange. Approved increases vary by plan.
“The department exercised its authority as provided by state law. The carriers may not agree with all the final decisions, but they are respecting the process, ”said Susan Halpin, executive director of the Connecticut Association of Health Plans, which lobbies on behalf of insurers. “Ultimately, the premiums simply reflect the underlying healthcare costs, and we can only agree with the Commissioner’s call to continue the work of all stakeholders to reduce the unit costs of patients. care.”
The rate hikes drew criticism from several government officials.
“I am disappointed,” said Comptroller Kevin Lembo, a former state health care advocate. “The cost of health insurance is going to go up for a lot… at a time when people can least afford it.”
“The requested rate increases were completely unwarranted and were only intended to extract more money from families and small businesses in Connecticut. … The tariff review process does not sufficiently protect consumers and needs to be completely rewritten.
Even though the Insurance Department approved increases lower than requested, health care attorney Ted Doolittle said they were still high.
“The fact that the insurance department has had to drastically reduce some of the rates charged does not inspire confidence that carriers have all the tools they need to keep medical costs under control,” he said. “Carriers are right that high medical prices lead to higher premiums. But that just leads to the question of why carriers are not able to negotiate better prices. “
“If our insurers are unable to negotiate fair and sustainable medical prices, this is something the state needs to know about and help. “
Attorney General William Tong called the higher rates “further pressure” on residents during an already difficult time.
“While I recognize that the Connecticut Department of Insurance hasn’t given insurers everything they’ve asked for, these rate hikes are still way too high,” he said. “I am not convinced that an increase was justified based on the trends we are seeing in our own state and nationally.”
The rate hikes are larger than those approved last year by the insurance department. In 2020, the department kept prices essentially stable for carriers on the stock exchange.
In 2019, Anthem had requested an average 15.2% increase in individual policies. The ministry authorized 6.5%.
That same year, ConnectiCare offered a 4.9% hike on individual plans. The ministry approved 2%.
Carriers cited several reasons for asking for higher rates, including growing demand for medical services and the rising cost of prescription drugs, among other trends. They also highlighted an increase in morbidity and expected severity of claims due to delays in care during the pandemic.
Insurers said recent legislation, such as a bill passed last year that caps a 30-day supply of insulin at $ 25, was also behind the recommended increases.
“What we see as the most important challenge facing the market [is] the rising cost of healthcare, ”Steven Ribeiro, regional vice president of sales for Anthem Blue Cross and Blue Shield, told state officials in a public hearing last month. “One of the key factors driving up the overall cost is the ever-increasing cost of prescription drugs, especially new drugs and those that treat serious illnesses. While Anthem appreciates their importance, these extraordinary and expensive treatments, like cell and gene therapy, result in additional costs to the healthcare system which must be reflected in our premiums. “
At the same hearing, residents, lawyers and lawmakers called on the state to reject the proposed increases.
“Most of you are immune to consumer anger, but there is anger out there,” said Diane Keefe, a Norwalk resident. “I pay $ 43,200 a year for a family of four with $ 5,000 deductibles at Aetna, and I’m on Cobra. It is unbearable. Families are suffering and there should be no increase.
Open registration for the 2022 health plans begins November 1.