Most insurance companies selling individual and small group health plans in Connecticut have requested significant rate increases for next year, attributing the proposed hikes to growing health care costs and uncertainty in Washington D.C. about the erosion of the Affordable Care Act.
The requests, however, are on average lower than last year, according to the Connecticut Insurance Department, which made the filings public on Friday. The proposed average individual rate increase request is 12.3 percent — compared to 25.51 percent requested last year. The proposed average small group rate increase request is 10.22 percent — down from 18.06 percent last year. Small group policies are offered to employers with 50 or fewer workers.
Two carriers — Anthem and ConnectiCare Benefits Inc. — filed rate increase requests for both individual and small group plans that will be marketed through Access Health CT, the state’s health insurance exchange.
The carriers attributed the increases to rising health care costs, including the cost of prescription drugs, and the increased demand for medical services, according to the insurance department.
Insurance Commissioner Katharine Wade said she is concerned about the “ongoing uncertainty in Washington that threatens to destabilize the health insurance markets, particularly for individuals.”
“The Department is pressing for clarity and guidance from the federal government so that we can finalize the rates for 2019,” said Wade, in a statement Friday.
The elimination of the individual mandate penalty in the ACA means that people who are typically younger and healthy wouldn’t be enticed to participate in the insurance pool, which could further destabilize the market.
Lack of participation shrinks the pool and increases the cost of insurance for the remaining members, according to the insurance department.
Carriers also attributed the rate increases to short-duration and association health plans. Still pending are final federal regulations on non-ACA compliant short-duration plans, which may have implications for the ACA pool. Right now, the ACA only allows people to have short-term plans for three months. If they were extended and renewable, this could shrink the ACA pool, thus leading to higher insurance prices, according to the insurance department.
Also, Connecticut and other state insurance regulators are awaiting clarification from the government on new federal regulations allowing for association health plans, which could also shrink the ACA risk pool, the department said in a statement.
Governor, lawmakers, advocates slam increases
After the rates were made public on Friday, many blamed the Trump administration for the proposed hikes.
“President Trump has been determined to undermine affordable health insurance in America, and as a result, middle class families and businesses in our state and across the country will pay the price,” said Gov. Dannel P. Malloy in a statement. “Next year, over a hundred thousand Connecticut residents will pay more for insurance because the president and his Republican allies in Washington have relentlessly and pointlessly attacked the Affordable Care Act, causing uncertainty in the healthcare exchange marketplace and increasing insurance premiums.”
State Rep. Sean Scanlon, D-Guilford, House chair of the legislature’s insurance committee, said in a statement Friday that he wasn’t surprised about the proposals, given the increasing cost of delivering health care and the uncertainty in the insurance marketplace.
“At a time when we should be working together to lower the cost of insurance and health care, President Trump’s recent decisions to end the individual mandate, end cost sharing reduction payments and suspend risk adjustment payments are all having the opposite effect of actually increasing premiums,” Scanlon said. “Regardless of who is to blame, the people of Connecticut simply can’t afford to continually have the price of their insurance to go up. I hope Commissioner Wade will take that into consideration when considering these rate requests.”
Frances Padilla, president of Universal Health Care Foundation of Connecticut, also expressed concern about the filings.
“Cumulative rate increases over the past few years far outpace the ability of small business and individuals to keep up,” Padilla said. “These rates could have been lower if there was not uncertainty in Washington.”
The department is reviewing the 14 rate filings for the 2019 individual and small group markets. The filings were made by 10 insurers for plans that currently cover about 293,000 people. More residents get coverage through larger employer plans, which are not part of this review process.
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 2019.
The 30-day public comment period on all filings begins on July 20 and comments can be filed online or can be delivered to the insurance department at P.O. Box 816, Hartford, CT 06142.
An informational hearing on the filings will be held Sept. 5 at 10 a.m., at the insurance department.
The department expects to make final rulings in September. Open enrollment for the 2019 coverage year begins on Nov. 1.
Once the rates are set, the actual increases paid by specific consumers will vary. Each customer’s actual rate is based on three factors: age, as older people pay more; geography, with consumers in Fairfield County typically paying the most; and the specific plan the person picks.
Many consumers also get discounts on their premiums, subsidized by the federal government, as part of the health law.