Connecticut health insurance rate increases driven by rising costs, not the Affordable Care Act, filings show

The double-digit rate increases recently granted to one and sought by two other large Connecticut health insurers are due mostly to increasing medical costs and only minimally to the impact of the Affordable Care Act, filings by the companies show.

Aetna Health Inc. recently won approval for a 12.6 percent increase in its small group health insurance following its request for 14 percent — just under a new 15-percent threshold that would have triggered a public hearing.

Anthem and ConnectiCare , meanwhile, are awaiting state rulings  on requests for 13.8- and 13.5-percent rate hikes respectively.  Collectively, the three plans cover a total of 120,300 employees and their dependents.

The insurance companies cite costs associated with the requirements of the Affordable Care Act — including the impact of the women’s preventive health benefits — among their reasons for needing the increases.

But the overwhelming reason for the rate increase requests is rising medical costs, the filings by Anthem, Aetna and ConnectiCare say. The companies say this is mainly because providers are raising their prices and patients are getting more care.

“People are accessing more services and hospitals, doctors and labs are charging us more,” Aetna spokeswoman Susan Millerick said.

The costs associated with the Affordable Care Act account for only a tiny fraction of the requested increases — less than 1 percent. These amounts cover the costs of the preventative women’s care benefits and the changes in cost sharing, said Paul Lombardo, the actuary for the state Insurance Department who reviews the rate increase requests.

These figures fall in line with projections by the non-partisan Congressional Budget Office that the Affordable Care Act would have minimal effect on small group insurance rates. In a 2009 report, the CBO estimated that small group rates would change in the range of 1 to 2 percent.

In the filings, the insurance companies outline some of the reasons for rising medical costs.

Anthem, in seeking a 13.8 percent increase, says that outpatient costs are 17.8 percent higher than a year ago. Emergency-room use and cost has increased more than 18 percent, for example, as have outpatient surgeries, Anthem said.

Anthem spokeswoman Sarah Yeager said the company went through a rigorous review of its rates. Anthem’s proposed increases reflect the fact that health-care costs continue to climb faster than the growth of premiums, she said.

“The proposed rates of our small group products are a reflection of the medical risks and costs associated with the market,” Yeager said. “We continue to be concerned with the claims cost in Connecticut.”

Aetna’s filing shows that costs for inpatient medical care have gone up over 19 percent, while outpatient-care costs have risen 14 percent. In addition, home health-care visits have increased almost 14 percent and radiology costs have risen 10 percent. At the same time, inpatient days for mental health and substance abuse have increased more than 31 percent, according to the filing.

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