On Friday, Congress passed a major Democrat bill aimed at reducing inflation that would partially reduce health care costs for those enrolled through the Affordable Care and Medicare Act. But while Connecticut lawmakers have praised the federal relief, they are also raising concerns about a proposed rate hike that could affect the plans of thousands of people in the state.
Connecticut Democrats celebrate the “Inflation Cut Act” after more than a year of negotiating a law that has taken many different forms and also includes tax policy reform and climate change provisions. But while Americans may see some tangible benefits in the near future, many health-related programs will have a much slower gradual.
The most immediate benefit is the extension of the Affordable Care Act booster benefits for three years. The boost was created under Democrats’ 2021 federal pandemic relief plan — the US bailout — and was due to expire at the end of 2022. The continuation of financial assistance to Connecticut families is expected to provide about $220 per month in insurance premiums, according to it. To Social Services Commissioner Deidre Gifford.
It will take several years to implement the remaining components of health care. The bill would affect thousands of Connecticut residents registered through the government exchange — Access Health CT — as well as Medicare seniors.
The bill also allows Medicare to negotiate prescription drug prices for the first time in history. It will initially apply to 10 drugs starting in 2026, and then the number will increase each year through 2029. The bill will also set OTC drug costs at $2,000 per year starting in 2026. About 19,000 people in Connecticut currently spend more than 2,000 out-of-pocket dollars annually.
Pharmaceutical companies have argued that this will stifle innovation and the creation of new drugs, but Gifford cited a Congressional Budget Office report saying it would not have a “significant impact” on new drugs over the next three decades.
While these actions will take much longer, drug companies will need to pay rebates to Medicare starting next year if costs increase more than the inflation rate year after year. According to Gifford, there are 700,000 people in Connecticut who receive health care through Medicare.
The legislation sought to set a broader cap on out-of-pocket costs for insulin at $35 a month, but enough Republican senators voted to block it so that those with private insurance would not apply. Now, the co-pay cap only applies to Medicare recipients who need diabetes medication, which will start in 2025 and cover about 35,000 people in the state, according to Gifford.
Connecticut has its own law that sets prices for out-of-pocket insulin at $25 per month. This applies to some residents who have private insurance such as those who are registered through a state exchange but does not apply to those with plans that are federally regulated.
But as Congress expands on some of the health-related benefits, state officials are concerned about potential price increases sought by insurers that average 20.4% more on individual health plans for next year.
Connecticut Department of Insurance The proposal will be reviewed 2023 prices at a meeting on Monday. The agency says the plans in question cover about 206,000 residents in the state. Members of the public will be able to watch or attend the high-level meeting in Hartford, and officials will be able to ask insurance companies questions. The insurance department is expected to make a decision in September whether to accept it, approve a small increase, or reject it entirely.
“This should be a time for Connecticut residents to get an explanation for why premiums should be so high,” Ted Doolittle, a Connecticut health care attorney, said in an interview.
“There is a lot of pressure on the insurance department to make sure the rates are as low as possible,” Doolittle added. “The burden of proof is on the insurers to show why the price they are asking is rock bottom and inevitable.”
At a news conference Thursday touting the health care benefits in the Inflation Reduction Act, Lamont said the insurance administration will take a “very hard and tough look” at carriers’ requests. He noted that federal legislation could take the pressure off hospitals, which in turn pass costs on to insurance companies.
“I’d like to think of this inflation-reducing law, for example, reducing the number of uninsured. That’s less costly for hospitals to afford now,” Lamont said.
He added, “We have a long way to go on inflation, but I think the inflation cut law will make a big difference and it will be a big difference not only this year, but at least in the next few years.”
As part of the reasons for the price hike, some insurers, including ConnectiCare, have cited the expected disruption to ACA subsidies that were set to disappear by 2023. ConnectiCare, which sells only individual plans on the state exchange, is seeking an average increase of 5% 25.2% for plans that currently cover 8,782 people.
ConnectiCare spokeswoman Kimberly Kahn said in a statement released in July that there were legislative and regulatory factors that were beyond the company’s control, such as the expected expiration of ACA’s extended support by the end of the year.
“Our proposed rates are based on several factors, including medical and pharmacy cost trends, along with the ongoing effects of COVID-19 on our members’ use of services, including access to delayed care,” Kahn said at the time.
“Legislative and regulatory environments also continue to present market challenges outside the company’s control, including the loss of the improved advanced tax credits provided through the US Bailout Act due to expire in 2022, and state-imposed benefits.” added.
But Blumenthal and other critics picked that argument up at a Friday morning news conference since Congress eventually adopted the legislation extending those subsidies for a few more years. They also cited that insurance companies are making record profits as a reason for the Insurance Department to reject the proposed increases.
“Demand for this huge price increase is crumbling like a house of cards under the slightest bit of scrutiny,” Blumenthal said. “If you look at the basis of that, insurers are assuming that there will be no extension of existing subsidies when Congress today gives final approval for that extension until 2025. Yet the insurers are betting on Congress failing.”
While Lamont and other state officials have focused specifically on health provisions, the Inflation Reduction Act is also one of the most extensive climate bills in recent history, providing tax incentives for producing clean energy and buying electric cars.
The bill passed a closely divided Senate on Sunday, prompting the House of Representatives to return to Washington after a month-long recess. The House approved the legislation in a partisan vote Friday evening.
While the bill’s main goal is to curb inflation, it left many Democrats’ priorities in order to strike a deal with lead negotiators. a Main franchise taken Early education and family-related programs such as childcare subsidies, the National Paid Leave Program, universal kindergarten, and continuing monthly payments for improved tax credits for children.
Republicans vehemently opposed the legislation and cited some reports from economists that it would have little effect on lowering inflation.
“Biden Blumenthal’s inflation is hurting Connecticut, and this latest giant spending package is yet another example of Democrats putting extreme progressive policies on the well-being of the American people,” Republican Senate candidate Leora Levy said in a statement.
lhagen@ctmirror.org