Health insurers call for average rate hike of 20.4% for 2023

Department of Insurance chart of rate hike requests for health insurance plans offered on the Connecticut Health Insurance Exchange. Credit: Screenshot / Connecticut Department of Insurance

Nine insurance companies have asked the state Department of Insurance to approve double-digit rate increases for personal and small business health insurance plans that will begin in 2023. The proposed average individual rate request is an increase of 20.4% compared to 8.6% in 2022.

The department “received 13 pricing requests from nine health insurers for plans that will be offered in the individual and small group market, both on and off the state-sponsored exchange, Access Health CT,” said said Department of Insurance Commissioner Andrew But. “Working within the authority granted to this department, we will closely review these filings to ensure that the rates requested comply with state law.”

ConnectiCare Benefits is offering an average increase of 24.1% for its individually listed plans.

Department of Insurance chart of rate hike requests for off-exchange health insurance plans in Connecticut.
Department of Insurance chart of rate hike requests for off-exchange health insurance plans in Connecticut. Credit: Screenshot / Connecticut Department of Insurance

The company argues this is because demand for services has increased. This factor is expected to have a projected impact of 12.1% on the insurer’s claims costs, according to their filing. They also point out that subsidies offered under the American Rescue Plan Act implemented in 2021 are set to end in 2023. They say they expect fewer customers to qualify for the tax credit on advanced premiums and they expect consumers to leave the individual market. .

Following the departure of customers, the insurance company expects the average morbidity of the risk pool to increase and lead to an adverse impact on 2023 rates.

More than 75,000 people are now covered by this scheme. The company is also asking for a 23.6% increase for its individual over-the-counter plans. The company is also asking for a 22.9% increase for its small business plans in exchange and a 24.5% increase for small group plans marketed outside of Access Health CT.

Anthem Health Benefits, the other insurer that offers plans on the Connecticut exchange, is asking for an average increase of 8.6% for its individual plans on the exchange.

The company says that about 9.2% of this increase can be attributed to medical cost inflation, provider contract changes and an increase in demand for these medical services. The plan currently covers approximately 27,698 people.

Anthem is asking for an average increase of 3.6% on small group health plans for employers with 50 or fewer workers.

Cigna Health and Life Insurance Company filed for an average rate increase of 19.64% on small group policies. Oxford Health Insurance requested a 13.4% increase for health plans used by 50 or fewer workers and a 15.7% increase for HMO plans used by 50 or fewer workers.

Insurance company UnitedHealthCare requested an average rate increase of 13.9% for small group plans. And Aetna Life Insurance Co. filed a rate case for a 14.1% increase for small group compensation plans that provide medical and prescription drug coverage to employers with 50 or fewer workers.

Both Harvard Pilgrim Health Care and HPHC have decided to exit the Connecticut market and will no longer offer new small group health plans for businesses. They will only renew existing plans until the end of their appropriate plan years.

Senator Matt Lesser, co-chair of the insurance and real estate committee, said the proposals are “breathtaking.” He said they will have a serious impact on small businesses and individuals and he wants to make sure the attorney general and health care advocate are involved in the rate review process.

Attorney General William Tong is asking for a formal hearing on the rate proposals because they exceed 10%.

“Health care costs and insurance premiums are already unaffordable for many Connecticut families, businesses and individuals, and these double-digit rate hikes demand careful consideration,” Tong said. “The Department of Insurance has previously agreed to hold public hearings on any rate increases greater than 10%, and that transparency is certainly needed now. We simply cannot allow insurers to assert costs and claims without our own independent analysis and review.

Less agree.

“They owe the public an explanation and they should provide one if they want to get a rate increase,” Lesser said.

As for solutions, the Connecticut General Assembly offered little to no answers this session on how to address the problem of escalating health care costs.

Republicans blamed Democrats for not acting.

“These proposed rate increases are stunning and infuriating,” said Senate Republican Leader Kevin Kelly and Sen. Tony Hwang. “They show not only the mounting damage of inflation, but also the damage of CT Democrats’ repeated refusal to address rising health care costs. We knew this day was coming, we warned that it was happening, and that’s why CT Republicans have offered solutions to prevent it — solutions that Democrats have repeatedly rejected.

They added: “”This year, Senate Republicans again proposed a to plan to rein in runaway healthcare spending. Access Health CT’s own estimates show our plan reduces premiums by $6,475 per year, or $540 per month for the average family. But top Democrats on the state Insurance Committee refused to even vote on the plan.

Democrats in turn blamed Republicans.

“These rate demands show that my colleagues, including nearly all Republicans, who believed the industry that reform was unnecessary and who fought the public option were deceived,” he said.

“The system is fundamentally broken,” Lesser said. “The rate increases they are proposing today are proof that the market is not working.”

He added: “This outrageous proposal is proof that they must be saved from themselves.”

Health attorney Ted Doolittle said he is also calling for a formal hearing on the rate hikes.

“The Office of the Health Advocate believes that any premium rate claim based on excessive medical expenses is itself by definition excessive,” Doolittle said.

He said they had to “explain and justify the anomalous and inflation-fueling international prices that underlie these massive rate demands.”

The insurance department will review the proposals and make a final decision — likely in September — on the rates that take effect Jan. 1. A 30-day public comment period begins today.

Click on here for tariff proposals and to comment on them.

Kristan F. Talley