Anthem won’t appeal rate rejection, but expects to file new request

Anthem Blue Cross and Blue Shield will not appeal the Connecticut Insurance Department’s rejection of its request to raise health insurance premiums by 19.9 percent for about 48,000 state residents.

But the company expects to file a new request that, if approved, would take effect April 1. Company officials are reviewing comments in the insurance department’s ruling and updated medical trend data, according to a statement from the company Monday.

“Rather than engage in a time consuming appeal that would leave our 48,000 individual members uncertain about their premium rates, we expect to use this information to submit a new filing to the CID with an April 1, 2011 effective date,” the statement said.

The policies at issue are individual market plans that are considered “grandfathered,” meaning they do not have to comply with several provisions of the federal health reform law.

Anthem argued that rising health care costs and utilization drove the need to raise premiums 19.9 percent, a change that would have taken effect Jan. 1 if it had been approved. The proposal drew intense criticism from consumers, advocates and elected officials during a November public hearing.

Acting Insurance Commissioner Barbara C. Spear ruled that the proposal was excessive and that the existing rates were adequate.

Department calculations determined that not increasing rates would be reasonable and actuarially sound, according to the ruling.

In its statement, Anthem said the company is committed to “doing everything possible to moderate the impact of rate increases on our members.”

“At Anthem, we are concerned with the current rate of health care cost growth in Connecticut and the premium increases that result; however, we believe premiums must be sustainable in order to ensure a stable health insurance market,” the statement said.

U.S. Department of Health and Human Services Secretary Kathleen Sebelius cited Spear’s ruling during a press conference last month to highlight a new proposed federal rule for handling health insurance rate increases. She was joined by Scotland resident Jennifer Bass, an Anthem customer who testified at the November public hearing about the hardships an increase to her $478 monthly premium would cause.

“States can be highly effective consumer advocates when they have the right resources and the necessary legal authority,” Sebelius said. “We saw that earlier this year in California. We saw it again in Connecticut recently when regulators rejected a 20 percent premium hike that wasn’t justified by underlying cost trends and could have been devastating for Jenny and her neighbors and friends.”

Just two months earlier, the state insurance department came under fire from another HHS official, who criticized then-Commissioner Thomas R. Sullivan for approving “extremely large” premium increases for other Anthem plans.