Regulator lowers most proposed health insurance rate hikes

Insurance Commissioner Katharine L. Wade.

Arielle Levin Becker /

Insurance Commissioner Katharine L. Wade.

Most insurance companies selling health plans in the state’s individual market will get to raise customers’ premiums in 2016, but not by as much as they proposed, and one major carrier will have to lower its rates, according to decisions released by the Connecticut Insurance Department Saturday.

The department is requiring changes to nine of the 11 rate proposals insurers filed for individual-market plans beginning Jan. 1, 2016. In seven cases, the regulator approved rate hikes that are lower than what the companies proposed, but in one case – ConnectiCare Benefits, which covers the most customers who buy plans through the state’s health insurance exchange – the insurance department’s adjustments led to an average 1.3 percent decrease from current rates.

The insurance department is also requiring one company, HealthyCT, to raise rates by more than the company sought, after determining that its proposed rates were inadequate.

Overall, the approved average rate changes range from ConnectiCare Benefits’ 1.3 percent decrease to a 21.7 percent increase for UnitedHealthcare plans sold outside the state’s health insurance exchange. Those figures are averages; specific plans sold by each carrier could have higher or lower rate changes.

About 167,000 people buy insurance in the state’s individual insurance market, including 96,966 who purchased policies through Connecticut’s exchange, Access Health CT. For any given customer, the size of the rate change will depend on the person’s age, county and health plan.

In addition, for many exchange customers – 72,583 as of last month – the rate hikes won’t translate directly into price changes because they receive federal subsidies to discount their premiums.

Insurance premium costs have drawn particular attention in the wake of the federal health law, which made significant changes to insurance market rules, including requiring nearly all people to have coverage and prohibiting insurers from rejecting customers based on their medical history, starting in 2014.

Insurers anticipated that those newly covered in 2014 would have higher health care costs because of pent-up medical needs that hadn’t been addressed, but several carriers this year said they no longer anticipated a need to account for pent-up demand.

2016 individual market insurance rate changes
Insurers submitted rate proposals in April, but some submitted revised proposals. The table below shows those proposals and the final rates approved by the Connecticut Insurance Department. Three companies found to have proposed excessive rates must revise their proposals based on guidance from the department; in those cases, marked TBD, the final rates are expected to be lower than what was proposed. The rate changes listed here are averages, and will vary based on the specific plan; the range of changes within each company’s plans is listed below. Some companies are listed multiple times because they sell plans under separate licenses or file separate rate proposals for their plans sold on and off the exchange.
Company Original request Revised request Approved request Range People covered On/off exchange
Aetna 5.60% NA 1.40% 0% to 3.8% 7,291 Off
Anthem Blue Cross and Blue Shield 6.70% 4.70% TBD TBD 55,000 Both
Celtic 15.95% NA 15.95% 15.95% 0 Off
Cigna 14.27% NA 9.55% 3.4% to 24.7% 660 Off
ConnectiCare Benefits Inc. 2% 0.70% -1.30% -7.0% to 3.3% 39,850 On
ConnectiCare Inc. 5.20% 5.10% 5.10% 5.10% 435 Off
ConnectiCare Insurance Co. 10.10% 9.80% TBD TBD 34,400 Off
Golden Rule 18.50% NA TBD TBD 3,414 Off
HealthyCT 13.96% 3.43% 7.20% -10.5% to 14.3% 23,485 Both
UnitedHealthcare 32.90% NA 21.70% 3.2% to 30% 712 Off
UnitedHealthcare 12.40% 11.40% 5.50% 0.5% to 14.5% 1,686 On
Connecticut Insurance Department

In seeking rate hikes for 2016, carriers cited anticipated increases in the cost of care for members – either from members’ using more services or more intensive types of care, or from higher prices for care or medication.

In six cases, the insurance department determined that the level of medical inflation the insurers built into their 2016 rates was too high, and approved rate changes based on lower figures.

That includes the three companies whose rate proposals were the subject of a July public hearingAnthem Blue Cross and Blue Shield, ConnectiCare Insurance Company, and Golden Rule. The department deemed each request excessive and gave the carriers instructions on how to revise the rates, but did not calculate the size of the rate hikes that would generate. The carriers must recalculate based on the department’s guidance and submit their rates by Sept. 3.

This is a picture of Insurance Department hearing officer Paul Lombardo, who will issue a recommendation on Anthem's rate proposal.

Arielle Levin Becker / The CT Mirror

Insurance Department Actuary Paul Lombardo, who reviewed the proposed rates.

For the other proposals, the department approved specific changes. That included allowing a 5.5 percent average rate hike for UnitedHealthcare plans sold on the exchange, down from the 11.4 percent the company proposed; and a 1.4 percent average increase for Aetna plans sold outside the exchange, down from the company’s 5.6 percent requested increase.

State law allows the insurance regulator to reject rates deemed either excessive or inadequate – that is, unlikely to bring in enough in premiums to pay members’ claims.

In requiring HealthyCT to raise rates by more than proposed, the department determined that the company had underestimated medical inflation and overestimated potential savings from initiatives intended to reduce costs or improve members’ health. HealthyCT, now in its second year of selling plans, is a consumer operated and oriented plan, or CO-OP, created with funding made available through the federal health law.

The rate increase the department approved for HealthyCT – 7.2 percent on average – is higher than the 3.43 percent the company proposed, but lower than the 13.96 percent rate hike the company originally sought in April. Carriers were allowed to revise their requests until late June, and several lowered their requests.

In a statement, HealthyCT CEO Ken Lalime said it wasn’t yet clear how the decision would affect the company. “Consumers in Connecticut can be sure that the Insurance Department was sensitive to their pricing needs,” he said. “We will continue to work with HealthyCT members to be sure that our products are working to provide value for them.”

Another factor the department cited in requiring Anthem and ConnectiCare Insurance Company to revise their rates is the anticipated cost of a change to the state’s mandated coverage for infertility. Beginning Jan. 1, insurers will no longer be able to limit those benefits to people under 40. ConnectiCare projected that change would add $1.14 to the monthly premium of each member, and Anthem projected a $2 increase, but the insurance department anticipates a lower cost and required the carriers to reduce the added monthly cost to 25 cents.

The two proposals that were approved unchanged were a 5.1 percent increase for ConnectiCare Inc., which has 435 members, and a 15.95 percent increase for Celtic Insurance, which has no current members.

ConnectiCare sells plans through three separately licensed companies, each of which has a separate risk pool and rate proposal.

ConnectiCare said in a statement Monday that the company typically does not comment before all filed rates are approved, and noted that some are still pending. “We are mindful of the impact rate increases have on our policyholders and we are doing everything possible to control costs,” the statement said. “We take our responsibility to control costs very seriously.”

Through a spokeswoman, Anthem declined to comment.