Lawmakers, health care advocates and customers made a vociferous plea to Connecticut’s insurance commissioner and regulators Wednesday to block rate hikes, calling the years-long cycle of increases on the state’s health insurance exchange unsustainable.
“What we’re not taking into account is the fact that this is like compound interest in the old bank account. Every year we have an increase. Every year that increase is then piled upon by the next year’s increase. And that happens over and over again,” said Rep. Tom Delnicki, R-South Windsor.
“It’s not sustainable,” he said. “We want people to join and get health insurance. And the best way to do that is by marketing it at an effective and lowest-possible rate. When you see increases like that, you’re sending a subliminal message to people that, ‘Hey look, you’re going to be seeing this kind of an increase next year and the year after and the year after.’”
The latest proposal by two carriers selling plans on and off Connecticut’s health insurance exchange is to boost rates, basing their requests for increases largely on a federal tax that will be imposed next year.
Anthem Health Plans has asked for a 15.2% average hike on individual plans that cover about 27,300 people. ConnectiCare Benefits Inc., which serves many state residents who seek policies through the exchange, requested a 4.9% increase on individual plans. There are about 75,600 people covered under those policies.
The carriers have cited several reasons for asking Connecticut’s insurance department to approve the rate hikes, including rising medical costs, an aging insured population and the return of a federal tax.
On Wednesday, the chief actuary for ConnectiCare said its request was driven by a higher unit cost (the amount a health provider charges for a service), increased use of services such as outpatient procedures, chemotherapy and radiation, and higher pharmacy expenditures.
“Specialty drugs cost 15 to 20 times as much as generic and brand-name drugs, and account for over half of total pharmacy spending,” the actuary, Neil Kelsey, said. “Most of these costs are for the treatment of cancer and inflammatory conditions.”
An executive for Anthem pointed to a shrinking number of participants on the individual market and a corresponding increase in the population’s morbidity.
“As a consequence, those individuals with more significant health care needs will be the most likely to purchase and retain their coverage,” he said.
The insurers also said the reintroduction of the federal Health Insurance Tax, or HIT, in 2020 prompted them to seek an increase in rates. The tax – implemented by the Affordable Care Act – was in place for 2018, suspended in 2019, and is due to take effect again next year.
The carriers have also requested rate hikes for policies sold outside of the exchange and for small group policies.
Anthem Health Plans filed a request for an average increase of 14.8% on small group health plans for employers with 50 or fewer workers. The proposed rates are for policies marketed both on and off the exchange and provide coverage for about 44,100 employees and their dependents, the insurer said.
ConnectiCare sought a 4.8% average hike for small group plans marketed through the exchange.
“The bottom line is, it is not sustainable for individuals to have the rate increases. It is not sustainable for businesses to have rate increases,” said Sen. Saud Anwar, D-South Windsor, at the public hearing organized by the insurance department. “We’ll be back here every single year with the same pattern unless we change some models. We have a real responsibility at this time to try and address that.”
Claudio Borea, a retiree from South Windsor, said Wednesday’s hearing in downtown Hartford was “pointless,” and he called on state insurance officials to back a public option health care plan.
“I think you have to change the system we have in place or else what’s going to happen is you’re going to have a few people at these meetings and most of us are going to vote with our feet,” he said, by moving to Canada.
Despite the remarks, state officials have noted that affordability and service problems are not grounds regulators can use to deny a rate increase.
The insurance department is expected to make a final decision on the rate hikes later this month. The public is invited to submit written comments via the department’s website for another week.
The Anthem and ConnectiCare policies will be on the market as of Nov. 1, the start of the next enrollment period, for coverage that begins in January.
While I understand the logic that healthcare insurers are using in asking for their rate hikes, everyone in the discussion is ignoring the obvious: we need a major overhaul of the entire healthcare system if we want our healthcare to be affordable in the future. The problem isn’t just federal taxes or generic versus name brand. The problem stems from a whole basket of separate problems that need to be solved. Healthcare consumers (you and me) are just as much at fault as the pharmaceutical companies, politicians, insurers and the rest. People who get their insurance paid by employers also need to get of their high horses and learn more about the problems, rather than being obstructionist. Until we all radically change our attitudes about what we will accept or demand from the system, we will continue to see healthcare costs eat up our lives.
I’m self-employed and dropped my health insurance several years ago due to the rising costs. Last year when I checked the rates, I would have spent slightly more than 30% of my gross income on health costs before coverage kicked in and then the plan would only cover 20% of my costs thereafter. And that was the cheapest of the seven plans, offered by only two providers, that were available to me. The other plans ranged between 31% and 50% of my gross income. Laughably, I make too much money to be eligible for a subsidy, yet not enough to actually afford insurance. I don’t understand why anyone would buy a for-profit insurance at such high rates that will set everyday folks back financially.
As the costs rise, more and more people will drop out, causing the insurance companies to hike rates again and again. It’s totally unsustainable.
The only real answer is a non-profit system that is focused on health CARE in the long term, not a yearly for-profit free for all.