State Insurance Commissioner Andrew Mais said on Tuesday that recently approved health insurance premium increases of 13% for individuals and 8% for small groups are needed because the cost of hospital care and prescription drugs continue to rise.
Cigna and ConnectiCare, which cover about 116,000 people in Connecticut, had requested premium increases of 20 and 25 percent, respectively, in July.
At a public hearing in August, ConnectiCare representatives said the company lost more than $65 million last year in the individual insurance market. They said the losses were due to previous refusals by the State Insurance Department to raise rates.
The ministry reduced initial requests by an average of 20.4% to 12.9% for individuals and by an average of 14.8% to 7.9% for small groups.
“We need to make sure the carriers are able to pay the claim when it’s due,” Mais said Wednesday morning, adding that a Connecticut market carrier left the state after “trying for years” to pay. complaints received. The company, HarvardPilgrim, will no longer offer plans in the state starting Jan. 1, 2023, according to the Hartford Business Journal.
Department spokesman Jim Watson told CT Examiner that HarvardPilgrim has reported that Connecticut is a “tough market” to offer competitive premiums while still being able to afford the rates charged by doctors and hospitals.
But also said the department is trying to convince more insurance companies to offer plans in Connecticut.
“My personal opinion is that we need more competition in this market,” he said.
Deputy Insurance Commissioner Paul Lombardo said inpatient and outpatient costs were up 8-10% and prescription drug costs were up 10-12%. He also said more and more people are seeking medical care, especially for mental health services. Lombardo also that people seeking care tend to be sicker than in previous years.
“We believe this is a direct result of people delaying their care during the height of the pandemic,” Lombardo said.
According to Watson, the number of people using medical services has increased by 10% over the past year. Normally, he says, the number of people using the same services increases by 3% per year.
Lombardo said insurance companies will also face the cost of paying for COVID-19 vaccinations and boosters. So far, the federal government has covered the cost of these vaccines, but companies may have to start footing the bill themselves as soon as 2023.
Average premiums in Connecticut are $581 for individuals and $20,735 for employers in 2022.
But said federal grants created by the American Rescue Plan Act, which were recently extended through 2025, would mitigate rate increases for people who get their insurance on Access Health CT, the public health exchange. State.
With the combination of federal subsidies and approved rate increases, Lombardo said a 40-year-old man who earns about $40,000 a year and gets his insurance on the state scholarship through ConnectiCare will pay about $10 more per year. month. A 40-year-old man who earns about $68,000 a year with ConnectiCare insurance will pay about $25 more per month.
FiercePharma reported in August that many of the nation’s largest health insurance conglomerates reported profits in the first half of 2022. UnitedHealth, which requested premium increases of 13.9% and was approved for a premium increase of 8.4% in Connecticut, made a profit of $10.1 billion from January. until June of this year. During the same period, CVS/Aetna made $5.2 billion in profits, Elevance, which owns Anthem, made $3.5 billion, and Cigna made $2.7 billion.
But pointed out that the department has limited profit margins for insurance companies to 0.5% this year, down from the normally allowed 2-3%.
“At the department, what we wanted to do was make sure we all sacrificed ourselves, including the insurance companies,” he said.
In a statement released on Tuesday afternoon, Republican Senators Kevin Kelly, R-Stratford, and Tony Hwang, R-Fairfield, criticized the Lamont administration for failing to embrace Republican lawmakers’ proposals to cut health care costs. health.
“The Governor’s administration has approved double-digit rate hikes at a time when working and middle-class families are already struggling with crippling inflation. Now the Governor’s administration speaks of a “shared sacrifice.” The people of CT have already sacrificed enough,” Kelly and Hwang said in the statement.
Asked what will happen after federal subsidies end in 2025, Watson told CT Examiner that the Department of Insurance is “very concerned about the level of health insurance premiums in Connecticut” — an issue he has related to the cost of health services.
The Department of Insurance, along with the Office of Health Care Strategy and the Office of the Health Care Advocate, will present a briefing on the cost of health care on October 3. Lombardo said it would give them the opportunity to ask “stakeholders” detailed questions. such as healthcare companies, hospitals and pharmaceutical companies.
“The only promise I can make to you as commissioner…we’re not going to stop working on this,” Mais said.
