But the companies’ rate proposals, made public by the Connecticut Insurance Department Thursday, suggest that, although the companies anticipate higher expenses overall in 2016, they are also expecting the medical needs of those newly insured under the federal health law to stabilize.
Because Obamacare required that insurers cover anyone who wanted to buy a plan, regardless of medical history, insurers anticipated an influx of customers in 2014 who had been uninsured and would have “pent-up” medical needs that would require significant care — and expense — in their first year of coverage. The carriers indicated they don’t expect those higher-than-usual needs to continue into 2016.
The health of those newly insured under the health law — and its impact on insurance costs — has been a major question since Obamacare passed. This is the first year that rate proposals have been based on the claims experience of plans sold through the exchanges to customers regardless of medical history, and the two largest exchange carriers proposed rate hikes lower than those they requested last year.
In addition, at least one company expects to gain younger members next year. ConnectiCare Benefits Inc. reported that its 2015 customers are younger than the year before, and anticipates a slightly younger population in 2016.
Despite that, the carriers projected increased costs, citing rising claims expenses and a planned reduction in protection against high-cost claims from a temporary federal program intended to provide stability for insurers during the initial years of the health law.
The rate filings are proposals, not actual changes. The insurance department will now analyze the proposals, accept public comments and issue decisions on whether the rate changes can go forward. The department could approve the rates as proposed, allow lower increases or deny any increase. Any changes allowed by the department would take effect in January 2016.
For people who buy plans through the state’s exchange, Access Health CT, and use federal subsidies to discount their premiums, any rate changes won’t be reflected directly in their bills. That’s because the subsidies are set to ensure that people don’t pay more than a certain percentage of their income for coverage. Although the prices people getting subsidies pay for coverage can vary from year to year for the same plan, those variations are not directly tied to rate changes in the specific plans.
ConnectiCare Benefits Inc., which has the most Access Health customers, requested the lowest average rate increase, 2 percent, although the actual rate change requested varies by plan. The company reported that it expects the overall health of its members to stabilize in 2016 compared to 2014, when previously uninsured people with pent-up medical needs joined the plans.
The highest average increase was requested by HealthyCT, which has some of the lowest rates on the exchange this year. HealthyCT, which began selling plans in 2014, began with some of the highest-cost plans in 2014, then lowered rates this year. For 2016, it requested an average increase of 13.96 percent for its plans sold on and off the exchange.
Anthem Blue Cross and Blue Shield requested an average increase of 6.7 percent for all of its individual-market plans sold in Connecticut — those sold through Access Health and outside the exchange. The company cited an anticipated increase in medical claims costs in 2016, and mentioned the cost of Sovaldi and other costly Hepatitis C drugs. But the company also reported that it no longer expected higher medical costs from pent-up demand of newly insured customers.
UnitedHealthcare, which began offering plans through the exchange this year, requested an average increase of 12.4 percent. Unlike the other companies, its rates were not based on its post-Obamacare individual market experience in Connecticut, since it did not offer exchange plans to individuals in 2014.