Health Insurance Rate Hikes Sought By Anthem & ConnectiCare

Emily Archacki
September 06, 2018 - 12:40 pm

FARMINGTON, Conn. (WTIC) Two major health insurers in the state of Connecticut are asking for rate increases for insurance policies sold under the Access Health/ConnectiCare exchange program. A public hearing was held Wednesday by the State Insurance Department to listen to these requests.

Anthem Blue Cross Blue Shield is seeking an average rate increase of 9 percent, while ConnectiCare wants to raise premiums by 13 percent.

Doctors continue to prescribe more expensive types of medication for patients, resulting in the cost of healthcare expenses rising.

“Our rates must be sufficient to account for these increasing costs,” said Neil Kelsey, ConnectiCare Chief Actuary. “Overall, medical costs contributes 11 percent towards the proposed increase to our rates.”

Included in the use of more expensive medications by doctors is the increase of specialty drugs used for medical treatment. The two top categories being cancer and inflammatory conditions.

 “Specialty drugs cost 15 to 20 times as much as brand, and account for over half of total pharmacy spending,” said Kelsey.

Another contributing factor to the proposed rate hikes, The Affordable Care Act. It requires some insurers to pay other insurers in the same market who cover people with higher medical expenses.

“We are required to pay our competitor a substantial amount of money,” said Kelsey. “Our rates must be adjusted in order to account for the impact of these payments. Accounting for this factor results in a 3.3 percent increase to our rates.”

As with any price increase for an item used by consumers, due to financial burden other items are sometimes given up. One item even being insurance coverage itself. 

The number of people who buy health plans outside of the Access Health exchange has dropped in recent years.

“We believe that this is a sign that there is a new and growing uninsured population. Those who prior to the Affordable Care Act could afford insurance did so to protect their families,” said Kelsey. “These individuals may not be eligible for subsidies, or may be deciding given their health status that they are willing to risk going without insurance coverage.”

The people who do remain are more likely to be sick, leading to the increase in cost for remaining customers.

Many members of the public argue that individuals and small businesses already have difficulty affording health insurance premiums.

“Rate review is an actuarial exercise for regulators,” said Rose Ferraro, Universal Healthcare Foundation of Connecticut Policy Officer. “But rising premiums are not an abstract math problem for families.”

Some people are having a hard time affording massive deductibles and frequent co-pays, in addition to high premiums.

Matt McDermott, lead organizer for Congregations Organized for a New Connecticut, recently experienced this.  His daughter needed out-of-network medical care and his insurance provider only counted a portion of the bill towards his out-of-network deductible.

“When we went to try to begin to establish a record of those costs, to work toward our deductible with our plan, we were told that the $300 wouldn’t be what was counted,” said McDermott. “But that only the rate that the insurer would reimburse would be what was counted.”

This meant that McDermott had to pay even more of the insurance plan’s $10,000 out-of-network deductible.

There are even some people who are leaving their insurance plans simply because they are unaffordable.

“When you have a couple that is getting close to retirement and they make $70,000 a year, they do not qualify for a subsidy when their premium is literally $30,000 a year,” said Jennifer Lovett, owner of South Windsor-based Crystal Financial Insurance Services. “Do the math. What’s left?”

These are just some of the individuals who asked the state insurance agency to deny the requests made by Anthem Blue Cross Blue Shield and ConnectiCare for rate increases.

 “Higher healthcare costs make for hard choices between getting care and other basic household needs,” said Ferraro.