Decision hinges on subsidies

Uncertainty results in higher rate requests

HARTFORD >> The two health insurance companies currently participating in Connecticut’s health insurance exchange will participate in 2018, unless the subsidies from the federal government disappear.

Anthem Health Plans and ConnectiCare Benefits both submitted double-digit rate increases last week for their exchange customers in the individual marketplace.

Anthem Health is requesting an average 33.8 percent increase for individual health insurance plans both on and off the exchange. Depending on which plan its 35,000 customers have the increases range from 19 percent to 52 percent. The company says it will continue meet the essential health benefits criteria mandated under the Affordable Care Act.

The increase, according to Anthem, is due to a 13.4 percent increase in the cost of medical care and the increased demand for medical services.

In its rate filing submitted to the Insurance Department, Anthem said the cost of the benefits being used by individuals “has continued to outpace premium increases.”

All 10 health insurance companies that filed 14 plans with the Insurance Department May 1, filed before the Republicans in the U.S. House approved the American Health Care Act, which repeals and replaces parts of the ACA.

Tu Nguyen, director and actuary for Anthem Health Plans, said in a letter to the Insurance Department that they are facing some significant uncertainties going into 2018.

“Anthem is filing its 2018 rates with the assumption that CSR (Cost Sharing Reduction) subsidies will be funded throughout the entire 2018 calendar year,” Nguyen said. “Unfortunately, the continuation of the funding for CSR subsidies for the 2018 calendar year is not yet certain.”

If the Cost Sharing Reduction subsidies go away, Nguyen said “Anthem likely will have no choice but to re-evaluate this filing which could include requests for additional rate increases, elimination of certain product offerings, or the exiting of certain individual ACA compliant markets altogether.”

The rates also reflect what Anthem believes will be a reduction in participation in the individual market and only the sicker customers who need insurance will remain.

“This dynamic is driven by a guaranteed issue market with rating constraints and an individual mandate penalty that continues to be far less than the cost of coverage for most individuals,” Nguyen said.

A spokeswoman for Anthem said the rate filings “reflect increases in the cost of delivering medical services coupled with pharmacy expenses and overall increased use of health care services by members in ACA-compliant plans. The rates we have filed assume Cost Sharing Reduction subsidies will be funded. However, the future funding of CSRs remains uncertain.”

ConnectiCare Benefits has asked for a 15.2 percent average rate hike for its 51,000 individual market customers on the exchange. The rate increases range from 8.4 percent to 18.7 percent.

ConnectiCare said medical costs are increasing 8.53 percent, which is part of the reason for the increased rate request.

“We are extremely mindful of the impact that rate increases have on our members, and have taken every possible step to keep our plans as fairly priced as possible within the reality of today’s health care environment,” a spokeswoman for ConnectiCare said Monday. “Our proposed rates are based on several factors including medical and pharmacy cost trends and expected utilization of services by our members.”

But it’s participation in the exchange is not guaranteed.

Neil S. Kelsey, vice president of actuarial services for ConnectiCare Benefits, said given the uncertainty of the current regulatory environment it “reserves the right to withdraw its products from the individual market or request a change to all, or any portion, of these rate filings, if it determines, in its sole discretion that a change in the current regulatory environment is likely to pose an actual or potential material adverse risk to CBI’s business.”

Eric Galvin, president and chief operating officer of ConnectiCare Inc., told James Wadleigh, CEO of Access Health CT, that they want to protect their legal rights under state and federal law with respect to participating in the exchange.

“Our intent is entirely a consequence of the current political and policy discussions that post a threat of material financial risk to ConnectiCare or its affiliates,” Galvin said in a May 1 letter obtained by CTNewsJunkie. “Rather, we are hopeful that these debates result in the certainty required for ConnectiCare to remain an active participant in the individual market, and we remain committed to working in partnership with state and Access Health CT to make it possible for us to continue to serve the people of Connecticut who depend on the high quality health coverage that we provide.”

He said they are “hopeful” they will be able to withdraw this notice in the coming months.

Insurance companies have until June 30 to withdraw from the exchange.

ConnectiCare Benefits said it would re-evaluate its participation if any federal or state laws change.

CTCare Insurance Co., which is the company offering off-exchange rates for ConnectiCare in the individual market is requesting an average 26.3 percent rate increase for its 37,142 customers.

Meanwhile ConnectiCare, for the first time is participating in the on-exchange small group market with Anthem Health Plans.

In that marketplace, Anthem is requesting an average 31.6 percent rate increase for its small business plans that cover 45,000 lives. The CTCare Benefits Inc. plan is a new product so there’s no increase to report.

“Connecticut continues to have a robust small group market with good carrier participation and more moderate rate stability,” Donna Tommelleo, a spokeswoman for the Insurance Department, said Monday.

In the off-exchange small group market, Aetna Life Insurance Company is requesting an average 19.4 percent increase for its 15,500 customers, CTCare Insurance Co. is requesting an average 10 percent increase for its 55,503 customers, HPHC Insurance Company Inc. is requesting a 17.3 percent average rate increase for its 11,785 customers, and Oxford Health Insurance Inc. is requesting an average 15.41 percent increase for its 12,472 customers.

Insurance Commissioner Katharine Wade said she will hold public hearings on some of the proposed rate increases on June 14.

While the Republican Governors Association blamed the rate increases on the ACA, U.S. Sen. Richard Blumenthal said they were the result of the confusion being caused by Republicans in Congress.

“Make no mistake, these rate increases are a direct response to the uncertainty, confusion and fear caused by the Republican-led assault on our healthcare system. Reckless efforts by the GOP to dismantle the Affordable Care Act are costing consumers before their disastrous plan even hits the Senate for debate,” Blumenthal said.

The Republican Governors Association said Gov. Dannel P. Malloy and Democrats “can’t ignore the disastrous impact Obamacare has had on the people of the state they are responsible for governing.”