Insurance companies are proposing significant increases in cash transfer rates. Here’s what you need to know

Insurers that sell insurance policies in and out of the Connecticut Affordable Care Act stunned advocates in July when they requested an average increase of 20.4% on individual health care plans for next year.

The proposed rate increases, published by the state Department of Insurance last month, include a recommended 14.8% increase on small group health plans.

Demands are much higher than what insurers sought last year for health policies for 2022. In 2021, carriers demanded an average rise of 8.6% on individual plans and 12.9% on small group plans.

“It’s amazing,” Lynn Eddy, program leader for outreach and engagement at Connecticut’s Global Healthcare Foundation, said last month. “Looking at these quotes, the ranges are off the charts.

“Our big concern right now is that, along with inflation and the fallout from COVID, these proposed increases are causing problems. Our concern is that people will take a look at this and decide not to get health coverage, because they can’t afford it.”

The Department of Insurance is studying the applications and is expected to issue a decision in September. Before that happens, the public will have a chance to make comments on the proposed price increases.

The Department of Insurance has scheduled a public hearing for August 15, starting at 9 a.m. in the Legislative Office Building (300 Capital Ave. in Hartford).

The audience can testify in person or virtual. Registration for personal testimony opens at 8:30 a.m. in the Legislative Office building on the day of the hearing.

The cut-off for registration for the virtual certificate is today (August 12). Virtually anyone who wants to testify can sign up by sending an email to with their name and written notes by noon.

Insurance company representatives will be given time to explain their rate hike requests, and insurance department officials can ask questions. The session will be broadcast on CT-N.

Here’s what you need to know about the offers.

What do insurance companies require?

Three insurance companies sell insurance policies on the Connecticut Stock Exchange: Anthem Health Plans and CTCare Benefits Inc. and ConnectiCare Insurance Company Inc.

Anthem requested an average increase of 8.6% for individual policies covering 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 increase of 3.6% on small group policies covering 19,271 residents. Suggested changes range from a decrease of 1.2% to an increase of 26.3%.

CTCare Benefits requested an average increase of 24.1% over individual plans covering 7,500 people. Suggested changes range from an increase of 18.7% to 33.2%, depending on the policy.

It also sought an average increase of 22.9% over small group plans covering 3,476 residents (increases range from 20% to 28.9%).

ConnectiCare, which only sells individual policies on the exchange, requested an average increase of 25.2% for plans that cover 8,782 people. The proposed increases range from 17.1% to 32.2%.

A full list of on and off-exchange plans can be found here, along with requests for price hikes.

Why do insurance companies seek higher rates?

Kimberly Kahn, a ConnectiCare spokeswoman, said medical and pharmaceutical costs were among the factors that prompted the company to increase asking prices.

“Our suggested 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,” she said.

“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 U.S. Bailout Act scheduled to expire in 2022, and state-imposed benefits.”

“Our filings reflect our expertise and ability to provide services on behalf of consumers in this market, and we look forward to working with the state as we continue the regulatory process,” said Alessandra Simkin, an Anthem spokeswoman.

Insurers will send representatives from their companies to a public hearing in August, where they will be questioned about the proposed increases in more detail.

what happened after that?

The actuaries together with the insurance department will review the required increases. As part of the review, they will look at trends in unit cost (the total expenses incurred by the company), use of services, and the expected severity of claims. The department will issue questions to insurance companies and ask for clarification if necessary. It will also hold a public hearing to get input from carriers, healthcare advocates and the public.

After the review, the department can approve the entire requested increase, reject it, or modify it to a different number. Final changes are expected to be posted in late August or early September.

Are suggested price increases always approved?

no. Last year, for example, the state insurance ministry approved an average increase of 5.6% for individual health plans for 2022, even though carriers requested 8.6%.

Management allowed a 6.7% median rate hike for small group policies, although insurers requested 12.9%.

In 2020, Anthem Health Plans requested an average increase of 9.9% on its individual plans, which served 22,071 people through the exchange. The Insurance Department agreed to a 1.9% increase.

That same year, ConnectiCare Benefits Inc. led to an average increase of 5.5% in its individual plans on the exchange, which at that time covered 75,174 clients. The Department of Insurance signed a 0.1% reduction.

How was the reaction like?

Health care advocates have criticized the proposed increases, saying they fear more people will go without coverage because prices are too high.

“My jaw hit the ground, obviously,” said Ted Doolittle, the state’s health care advocate. “I am very concerned that people will go without coverage because of these high prices. Insurers and service providers have to explain to people in the state why this is imperative and there is no alternative.”

Ed, of the Universal Health Care Foundation in Connecticut, said the proposed increases “don’t seem to make sense.”

“Why is the carrier asking for 8.6% in the individual market on average, 3.6% in the small group market, and the other company asking for 24% and 22% in these two markets — it seems to pull numbers out of a hat,” she said.

State Attorney General William Tong has requested a private hearing that will allow officials to gather evidence and thoroughly question insurance companies about the proposed increases. Officials will be able to question witnesses and give their testimony in a public place.

The Insurance Department did not agree to the formal hearing.

“Health care costs and insurance premiums are already unaffordable for many families, businesses, and individuals in Connecticut, and these double price increases require rigorous scrutiny,” Tong said.

When does open registration start?

The Health Policies 2023 open registration begins on November 1.

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