The Middletown Press (Middletown, CT)
Nonprofit health insurer alone in growing rolls
In its first full year under CVS ownership, Aetna’s enrollment in its home state of Connecticut dropped by more than 80,000 members, accounting for the majority of a significant drop in coverage by commercial health insurance underwriters as employers continued to migrate to their own, selffunded plans.
About 123,000 fewer people in Connecticut were covered under standard commercial health insurance plans in 2019, according to updated figures published by the state Department of Insurance, dropping the total 6 percent to 1.83 million people.
Operated as a nonprofit, Harvard Pilgrim Health Care was the only underwriter to gain members in Connecticut last year, adding nearly 1,800 to push its totals up 7 percent to just over 28,000 people.
In an analysis last month, the Kaiser Family Foundation indicated that COVID-19 layoffs last spring did not appear to result in an immediate, significant swing nationally in the number of people enrolled in health insurance. The think tank indicated that could be the result of many furloughed workers obtaining replacement coverage through public health exchanges like Access Health CT, which allow people to sign up in the event of a lost job or other major life event; or Medicaid programs like Connecticut’s
Husky Health plan.
Connecticut’s regular open enrollment period runs from Nov. 1 through Dec. 15 for employers or individuals to switch providers.
CVS acquired Aetna in November 2018, a combination that scotched former Aetna CEO Mark Bertolini’s plan to move the headquarters to New York City, but which shifted corporate oversight to Woonsocket, R.I., where CVS has its main office under CEO Larry Merlo.
Last winter weeks before the COVID-19 pandemic overwhelmed hospitals, Aetna’s President Karen Lynch told investors that the company was seeing continued rapid adoption of self-insured plans among employers, including by smaller employers. Lynch added that Aetna has come under competitive underwriting pressure as well from other carriers offering small-group coverage.
Under self-insurance plans, organizations sock away money in their own pools to pay out insurance claims, often hedging their bets by tacking on “stop-loss” insurance policies that allows them to offload some of those costs to other carriers in the event of unanticipated numbers or medical severity of claims. As of 2017, about 41 percent of health plans were fully self-insured, according to a study published last February by Deloitte and Advanced Analytical Consulting Group. Another 7 percent had a hybrid structure, with commercial carriers picking up a portion of coverage.
The Connecticut Insurance Department does not include people on selfinsured plans, even in instances in which health insurers continue to handle the administrative chores of paying for claims as the case with Aetna and many others.
“We’ve been offering a self-insured product at the smaller end of the segment to combat what we’ve seen relative to those changes,” Lynch said on a conference call in late February. “In small group, we continue to be pressured in that business, and we are contracting in that business.”
Anthem remains the dominant commercial health insurance carrier in Connecticut, entering this year with a membership of 881,000 people, down nearly 16,000 from a year earlier for a 2 percent drop. Nearly one of every two people on plans under the regulatory purview of the Connecticut Insurance Department are covered by Anthem.
“We do expect, as unemployment continues, to lose more commercial (members) — I don’t want to leave you with the impression that we won’t,” said Anthem CEO Gail Boudreaux during a late July conference call. “But overall, we feel we had a very resilient ‘catcher’s mitt’ across our book of business.”