Proposed health insurance rate hikes under fire

August 22, 2023 6:18 pm
• Last Updated: August 22, 2023 7:41 pm

State lawmakers and officials who spoke this week during a hearing on proposed increases in health insurance rates bemoaned who wasn’t there: chiefly hospital representatives.

“We’re looking at a medical system dominated by two networks ― a duopoly,” state Rep. Holly Cheeseman, R-East Lyme, said during Monday’s hearing in the Legislative Office Building in Hartford. “We’re looking at, in effect, only two games in town. … What ability do they really have to drive those rates?”

Cheeseman, who was referring to Yale New Haven Health and Hartford HealthCare, the health care systems that dominate southeastern Connecticut, said there’s no way to address the soaring rate increases sought by insurance companies without investigating all the parties involved in setting prices.

In a written statement, she said insurance companies blame hospital chains and government mandates, while hospital chains blame insurance companies and drug providers, and drug providers blame pharmacy benefit managers.

“The people who get caught in the crossfire are the people who are paying for the premiums …,” Cheeseman wrote.

In June, such insurers as Anthem, Cigna and ConnectiCare proposed 2024 insurance rates for individuals and small groups or employers with fewer than 50 employees, including for plans sold through Access Health CT, the state-sponsored health insurance exchange. A total of 10 filings by nine different insurers involve policies that cover about 188,000 people.

The proposed individual rates, which are subject to approval by the state Insurance Department, are up, on average, 12.4% compared to 20.4% for 2023. The increases range from 9.8% to 17.5%. For small groups, the proposed increases average 14.8%, the same as in 2023, and range from 7.5% to 23.0%.

Last year, the insurance department ended up approving average increases of 12.9% for individual plans and 7.9% for small group plans.

In an Aug. 15 letter to state Insurance Commissioner Andrew Mais, Connecticut’s attorney general, William Tong, asserted that the proposed increases for 2024 “are unjustified, unsupported by evidence, and must be rejected.” He noted that while the insurance department does not approve large and self-insured plans covering the majority of Connecticut residents, the department’s handling of the latest rate requests will have an impact on health care costs for everyone in the state.

Tong was frustrated upon emerging from Monday’s hearing, which drew residents as well as officials and representatives of insurance companies. At a press briefing, he stepped up his opposition to the requested rate hikes, calling them “excessive” and “unaffordable.”

He said the insurance companies have based the need for the proposed increases, in part, on “trend,” which he said is “a fancy, industry term” for where costs are headed. He said objective analysts have forecast an increase in medical costs of less than 6% while the insurers have put it as high as 11.2%.

Tong and other speakers at the briefing, including Ted Doolittle, the state health advocate, and state Sen. Jorge Cabrera, D-Hamden, co-chairman of the legislature’s Insurance and Real Estate Committee, said insurance executives provided no useful answers to the questions they posed.

When he asked whether insurance companies negotiated “line by line” with big providers, Tong said he expected the answer would be yes.

“The answer I got was ‘No, we don’t do that …,’ ” he said. “My reaction was, ‘You’re kidding. You don’t actually negotiate costs?’ … The ‘trend’ becomes a self-fulfilling prophecy. Costs rise to meet the trend. … Nobody’s ever held accountable.”

Tong said he Googled the insurers during the hearing and learned that the Anthem and Cigna CEOs each were paid more than $20 million last year.

Cabrera said he was hopeful the insurance committee would consider bills limiting rate increases during next year’s legislative session.

The insurance department expects to ruled on the proposed rate increases in early September. Open enrollment in health plans for the 2024 coverage year begins Nov. 1.

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