Mike Smith counts himself as lucky. When, at 21, he discovered a golf ball-sized tumor on his neck, he had health coverage and a support system to back him up.
“I was lucky because it was only stage 2A when I was diagnosed,” said Smith, now 35, of Milford. “I was lucky that my mom worked a job that provided good quality health insurance. Otherwise, I’d still be crawling out of the nearly million dollars in medical care needed to keep me alive. But we shouldn’t leave the health and the financial fate of our family, friends and neighbors to luck.”
Smith asked representatives of the state’s insurance department to reject the 20.4% average increase that insurance companies are seeking for 2023 individual health plans in Connecticut.
“Health insurance prices have gone up. But unlike a pickup truck or an SUV, you can’t downsize your health care and save on gas,” he said. “When costs for health insurance get too expensive, you go without. We can, we should, and we must do better.
“If we ask the hard questions, we can fix this system so the survival that’s driving a tough medical diagnosis, both physically and financially, isn’t based purely on luck.”
Smith was one of dozens of residents and elected and appointed officials who addressed the insurance department Monday, asking its leaders to dismiss a request by insurance companies to raise rates on next year’s health policies.
In addition to the substantial average increase on individual plans, insurers who sell policies on and off Connecticut’s Affordable Care Act Exchange are seeking an average hike of 14.8% on small group plans.
The requests are substantially higher than what insurers sought last year for 2022 health policies. Carriers in 2021 asked for an average increase of 8.6% on individual plans and 12.9% on small group plans.
“I’ve been taking care of emergency patients in the tens of thousands … which means I’ve hopefully improved the health of tens of thousands of people. I know I’ve saved the lives of probably hundreds of people. And unfortunately, in doing that, I have also ruined the financial health of hundreds or thousands of people,” Phil Brewer, an emergency physician who has practiced for 40 years, testified Monday. “I’ve said many times that I love what I do. But unfortunately, as a result of what I do, many of my patients end up going into bankruptcy. I have a strong opposition to these rate hikes.”
Three insurers are selling policies on Connecticut’s exchange: Anthem Health Plans, CTCare Benefits Inc. and ConnectiCare Insurance Company Inc.
Anthem requested an average increase of 8.6% for individual policies that cover 27,698 people. The proposed changes range from a decrease of 1.8% to an increase of 16.1%, depending on the plan.
The company also sought an average hike of 3.6% on small group policies that cover 19,271 residents. The suggested changes range from a decrease of 1.2% to an increase of 26.3%.
CTCare Benefits asked for an average hike of 24.1% on individual plans that cover 75,003 people. Proposed changes range from an increase of 18.7% to 33.2%, depending on the policy.
It also sought an average hike of 22.9% on small group plans that cover 3,476 residents (increases range from 20% to 28.9%).
ConnectiCare Insurance, which only sells individual policies on the exchange, requested an average increase of 25.2% for plans that cover 8,782 people. Suggested hikes range from 17.1% to 32.2%.
Several other companies, including Cigna and Aetna, are selling plans off the exchange.
Representatives from only two insurers — ConnectiCare and Cigna — attended and spoke at the public hearing Monday at the Legislative Office Building. A spokesman for the insurance department said only those two companies were invited because they had the highest rate requests of all the carriers. Cigna is seeking an average increase of 19.6% for its off-exchange small group plans. ConnectiCare Insurance asked for an average hike of 29.3% on its off-exchange small group policies.
Sarah Souza, small group actuarial director for Cigna, said even with the proposed increases for 2023 plans, the company’s premiums would be lower than the market average.
“For silver plans, which are the most popular amongst small employers, we have the lowest plan in six out of the eight rating areas representing the vast majority of where small employers are located,” she said.
“Percentage increases are all relative to the base figure. As such, while we may have among the higher proposed increases, we continue to have among the lowest actual out-of-pocket premium cost when all is said and done,” added Wendy Sherry, vice president of Cigna’s U.S. commercial markets.
ConnectiCare has attributed its proposed increases to rising medical and pharmaceutical costs, as well as delayed care due to the pandemic.
Karen Moran, ConnectiCare’s president, said Monday that the company sustained over $65 million in losses in the individual market over the last year because rate increases have not kept up with higher utilization of medical services and the cost of prescription drugs, among other expenses.
“For an insurance program to be sustainable, rates must be adequate to provide for payment of claims and the administrative costs of running the program. For the past year, the total insurance premiums we have received are far less than the cost of care we’ve actually funded,” she said. “The premiums previously approved by the insurance department were significantly below what was necessary for us to meet the needs of the members. … The single most important driver in our proposed rate increase is to restore rates to an adequate level.”
“[Another] significant driver of the required premium is medical trend, which is the increased cost of reimbursing health care providers,” Moran said. “Utilization of medical and pharmacy services is exceeding pre-pandemic levels in 2022 and is expected to continue due in large measure to the needs of the people we serve.
“In short, we have not requested any more than we absolutely need in order to remain part of the exchange.”
But residents and elected officials said many won’t be able to afford coverage if the proposed rate increases go into effect.
“I recently heard from a senior who explained that she was making a choice on whether she was going to go without food or health care or prescriptions,” said Rep. Robin Comey, D-Branford. “I know these hikes will push insurance even farther out of reach for so many people — young adults, seniors and young families.
“Many people I’ve spoken with are planning on putting off their care at the expense of their long-term health and well being. … Our goal as a state should be to insure as many people as possible no matter their age, their ZIP code or their racial and ethnic disparities.”
Rep. Holly Cheeseman, R-East Lyme, recounted her own ordeal purchasing insurance.
“If this were six years ago, I would be sitting here as a member of the public, when my husband died and my son and I had to take out individual policies. … I remember having a dog bite and deciding I was better off putting butterfly strips on it than going to the emergency room, because I would have that full out-of-pocket cost,” she said. “So I think we have to remember the price our residents are paying, that their families are paying and indeed that the small businesses are paying.”
Attorney General William Tong asked representatives from the insurance companies if they perform an analysis of whether customers can afford their premiums before requesting an increase.
“From an actuarial standpoint, that is not a consideration when we set rates,” Neil Kelsey, vice president and chief actuary for ConnectiCare, replied. “Our rates cannot be excessive, [they must be] non-discriminatory, and they must be adequate. Those are the three stipulations or thresholds that the actuarial analysis has to comply with.”
Sherry added that “it’s the competitive market that really helps to determine whether our rates are affordable.”
Tong said Connecticut families are “suffering.”
“They’re getting squeezed every which way,” he said. “The price of gasoline, home heating oil, natural gas and electricity are still up. We paid 13% more for groceries last month than we did a year ago. … Rent, housing, all up. And so it is clear that Connecticut residents — individuals in the individual market, small groups, small businesses — cannot afford increases as high as 20.4% on average.”
Actuaries with the insurance department are now reviewing the requested increases. They will examine trends in unit cost (total expenditure incurred by the company), utilization of services, and expected severity of claims as part of the process.
After the review, the department can approve the full requested increase, reject it or amend it to a different number. The final changes are expected to be published in late August or early September.
Open enrollment for 2023 health policies begins on Nov. 1.