HealthyCT, a new insurer, has significantly reduced what it’s proposing to charge customers who buy health plans through the marketplace created by the federal health reform law.
The new proposals would make the average rates offered by HealthyCT the lowest to be offered through the marketplace, known as Access Health CT.
If approved, the average monthly premium paid for a HealthyCT plan for an individual would be $271, and the average for a small group would be $408, although those figures would vary considerably based on a person’s age, location and the specific plan selected.
HealthyCT CEO Kenneth Lalime said the company revised its rate proposals after getting new data suggesting that the population likely to buy coverage is healthier than previously anticipated. The lower rates also reflect assumptions about cost savings from care coordination programs the company is developing.
Because it’s a new company, HealthyCT had no medical claims experience to use in developing its rate proposals, and instead relied on health cost data from the actuarial firm Milliman. Lalime noted that the nonprofit insurer was also the first to file its rate proposals for plans to be sold through Access Health.
“We were knowingly conservative, with the recognition that if changes needed to be made, it’s probably better to be able to make those changes going forward in a direction that would be positive for the consumer, versus the other way around,” he said.
The revised rate proposals drew praise from Kevin Counihan, Access Health's chief executive.
"We are delighted with the new rates filed by HealthyCT," he said Friday. "It represents the power of market forces and competition serving the residents and small businesses in our state, and it is an indication that competition works."
"It also shows that insurers seem somewhat confident that younger, healthier people will be entering the marketplace -- many of them for the first time," Counihan said.
Under the revised filing, the average cost for an individual-market HealthyCT plan dropped by 36 percent, from $427 per month to $271. There’s a wide range in what customers could pay, however -- from $111 to $1,080. That range is also lower than in the previous proposal.
The average monthly rate proposed for small groups fell by a smaller degree, from $446 to $408. The range of potential prices dropped, and now stands at $144 to $1,312.
All the rates are still just proposals, and must receive approval from the Connecticut Insurance Department before being finalized. The department can require the rates be increased or decreased. It’s expected to issue decisions by July 31.
Access Health CT is the state’s health insurance exchange, a marketplace for individuals and small businesses to buy coverage. It will open Oct. 1 to sell plans that take effect Jan. 1. Officials expect between 80,000 and 100,000 customers in the first year, many of whom will qualify for federally subsidies to discount their premium costs.
The price of health insurance plans sold on each state’s exchange has been a major source of interest and dispute as supporters and opponents of the health reform law await its roll out.
Experts say it's difficult to make direct comparisons between the cost of the new plans and existing plans because the health reform law includes new coverage requirements, meaning that the new plans cover different benefits.
Some also caution against comparing prices between states.
New York recently drew attention when it announced that prices would drop for insurance sold through its exchange. But New York, unlike Connecticut, already requires carriers to sell health insurance to anyone who seeks it, without charging more for people in worse health. As a result, prices rose, causing healthier people to drop coverage.
Beginning Jan. 1, the federal health reform law will, like New York law, require insurers to cover anyone who wants to buy their policies and prohibit them from charging more for people with pre-existing conditions. But it also requires almost everyone to have insurance, a key step that the insurance industry has argued is necessary to ensure that younger, healthy people remain in the insurance pool.
In a state like New York, where pre-existing conditions don't disqualify someone from insurance, the major change next year will be adding younger, healthier people to the insurance pool, potentially driving down prices. In most other states, by contrast, younger, healthier people will likely be added to the insurance pools, but so will people who have significant medical problems and have been shut out of coverage in the past.
In addition to HealthyCT, four insurers have also submitted proposals to sell plans through Connecticut's exchange. The proposed prices for their plans are:
Aetna: Ranges from $111 to $1,175. Average: $364.
Anthem Blue Cross and Blue Shield: Ranges from $102 to $1,259. Average: $441.
ConnectiCare: Ranges from $132 to $1,005. Average: 424.
Anthem Blue Cross and Blue Shield: Ranges from $174 to $1,525. Average: $630.
ConnectiCare: Ranges from $177 to $1,540. Average: $565. (ConnectiCare withdrew this proposal Friday afternoon, saying it wants to concentrate on the individual market.)
United HealthCare: Base rate: $515 (this is the starting point, from which the rate would be adjusted up or down based on a person’s age, location and specific plan).