A coalition that includes labor unions and community groups called for the removal of state insurance Commissioner Thomas Sullivan Monday, saying he “consistently rubber stamps rate increases for individual health insurance policies.”
“Your administration and Commissioner Sullivan are allowing our health care system to be rationed by health insurance companies who only give care to those who are healthy or wealthy enough to receive it,” leaders of the group, Citizens for Economic Opportunity, wrote in a letter to Gov. M. Jodi Rell.
Rell’s office declined to comment and referred questions to the department of insurance.
Sullivan has become the focal point in disputes over how health reform will affect insurance premiums in Connecticut. State and federal officials criticized him after the Insurance Department approved double-digit rate increases attributed to the health reform law. Some critics have cited research suggesting that health reform should have only a modest effect on insurance premiums.
At a press conference Monday, during which Citizens for Economic Opportunity leaders were joined by state Sen. Edith Prague, D-Columbia, and state Rep. David McCluskey, D-West Hartford, one Anthem customer, Sarah Littman, called Sullivan “a shill for the insurance industry.”
In a statement released by the department, Sullivan said removing him as commissioner would do “nothing to address the inconvenient truth that the federal healthcare reform law has caused premiums to increase due to the federal government’s failure to address the rising costs of medical care while simultaneously increasing the value of the benefits carriers are required to provide.”
Sullivan compared health insurance plans to cars, saying that the health reform law prohibits carriers from offering Hondas and requires them to sell Mercedes.
“It’s a sad but true fact that in this scenario – where only Mercedes are available – most consumers who only want a Honda will lose,” he said. “This is what we are seeing here – and the rate increases which are happening nationwide are emblematic of that.”
The rate increase that has drawn the most attention, a nearly 47 percent hike for an Anthem Blue Cross and Blue Shield plan, affects a small portion of the market – about 2,500 people, Connecticut Insurance Department spokeswoman Dawn McDaniel said.
The plan previously limited coverage of prescription drug benefits to $500 a year. Under the Patient Protection and Affordable Care Act, the plan must raise that limit to $750,000. Sullivan cited that change – and the 23 percent cost increase it produced – last week in a letter responding to criticism from a Department of Health and Human Services official.
In the letter, Sullivan warned against comparing health plans offering different benefit packages.
“In my view, such a comparison does not address the very important point that comprehensive benefit packages cost more than those plans offering minimal coverage,” he wrote.
The requirements of the health reform law will have varying effects on the costs of health insurance plans, depending largely on the benefits that plans already cover. People whose plans already provide rich benefits will not likely see a large impact from the law, McDaniel said. By contrast, people whose plans offered minimal benefits, such as relatively low annual or lifetime limits on coverage, could see significant premium increases as their plans increase benefits to comply with the law.
The Citizens for Economic Opportunity letter, signed by President Phil Wheeler and Director Karen Schuessler, said the rate increases Sullivan approved had left consumers “with medical needs driven to financial ruin,” and called Sullivan’s statement about the effect of the newly required benefits “total fabrication of the facts.”
They called the argument that health reform produced higher rates a “distortion” being spread by “radical right politicians across the country” and cited multibillion-dollar profits of the five largest for-profit insurers, which they called an “outrageous injustice.”
“They’re playing politics with our health care,” Wheeler said during the press conference.
He said reports of the nearly 47 percent increase have led people to believe everyone’s insurance rates will go up that much, and said the rate increases are intended to sway voters before next week’s elections.
Wheeler and Schuessler also cited Sullivan’s opposition to a proposal earlier this year that would have established a new rate review process and said he “is opposed to holding public hearings and conducting a thorough rate review.”
“What is Mr. Sullivan afraid of?” they wrote. “When the system is more transparent and consumers have a voice in the process and rate decisions are made openly, everyone benefits.”
The insurance department announced Monday that Sullivan plans to hold a public hearing on Anthem’s filing for rates that will take effect Jan. 1. The company has not yet filed the rate request.
“Based on the ongoing rate increase requests and that Anthem holds a majority of the market share in Connecticut, I have determined it in the public interest to hold a public hearing on Anthem’s 2011 rate filing,” Sullivan said in a statement released by the department.
The rate filing will be posted in the “what’s new” section of the department’s website when it filed, according to the insurance department.
The insurance department received a $1 million federal grant last week that McDaniel said will allow it to make the rate review process more transparent and give people more confidence in what the department does.
“I think a lot of people aren’t sure and when people aren’t sure, they assume,” she said.
The department will develop a user-friendly system on its website to allow people to view rate filings and make comments, which will be added to the official record. People can review and comment on rate filings now, but the web-based system will make it easier to do so, McDaniel said.
Some of the grant money will be spent on tools to improve the rate review process. The department has already purchased two modeling tools that McDaniel said will “provide additional rigor to our already rigorous process.”
The grant will also be used to improve data collecting and reporting, which will allow the department to track and analyze rate request data in ways it does not now.