Health insurance companies in Connecticut want to raise rates in 2022 because of a projected increase in demand for health services after the pandemic, while consumer advocates are insisting on more affordable options.
But both are pushing for a more thorough investigation into what continues to be the main driver of insurance rates: the rising costs of health care.
“The rate review process that is undergone every year in Connecticut is an important area to explore why — why are the prices this high?” asked Ted Doolittle, the state’s Healthcare Advocate.
Insurance companies are requesting average premium increases for coverage in 2022 between 5.1% and 15.8%, which are higher than last year. The rate requests became public earlier this month.
Any changes would apply to individual and small group health plans on and off the state’s Affordable Care Act exchange, Access Health CT. Those plans currently cover about 222,700 people.
This is the second time the state Insurance Department has had to review and rule on insurance rate filings during the ongoing pandemic.
“In the past couple years, they have cut some of these rate requests. I hope that that happens again,” Doolittle said. “Certainly, when you’re talking about a bottom line figure of raises of 14% and 15%, one would hope that there’s a little room to make that substantially more consumer friendly or cheaper.”
The premium prices people see when buying insurance are influenced by closed-door contract negotiations between health insurers and health organizations, hospitals, health offices, pharmaceutical companies and other providers, which set pricing for health care services and products.
Pricing and overall patient need for services play into yearly medical cost trends. A June report by PricewaterhouseCoopers’s Health Research Institute projects a rise in medical costs in 2022.
COVID-19 vaccination, testing and treatment will likely continue into the new year and people will also seek health care that they deferred during the pandemic, according to report authors.
That could include a greater need for mental health care and addiction treatment. National survey data points to elevated levels of anxiety and depression since last March. A record 1,378 people in Connecticut died from drug overdoses in 2020.
Susan Halpin, executive director of the Connecticut Association of Health Plans, said that insurers foresee a sicker population overall going into next year.
“We also have new technologies coming on board, we have new drugs that are coming out that are exorbitantly expensive,” she added. “All of those things are clearly factoring into the costs and the trends that are reflected in the premiums that health insurance carriers are proposing.”
ConnectiCare is among two insurance carriers offering plans on Access Health CT, where people may be eligible for zero-cost coverage with federal subsidies, depending on their income. The other exchange carrier is Anthem.
Neil Kelsey, ConnectiCare vice president and chief actuary, said 80 to 85 cents for every dollar that comes in from premiums goes back out to pay health care providers for their services to patients, as required by federal law under the ACA.
“You know, to be fair, the cost to the providers is going up as well,” he said. “They had a lot of issues last year, they have equipment, they have things they have to buy, so their costs are going up as well.”
Doolittle said the insurance department can be a first line of defense in keeping premiums down, especially when they’re affected by health costs.
“I hope that the insurance department will go deep on these rate requests and get down to the granular level of ascertaining which providers, which drugs, which pharmaceutical manufacturers is this money needed for,” he said. “Those are things that consumers don’t know, and those are things that the insurance department has authority, in my view, to explore, and they should explore aggressively.”
Gov. Ned Lamont in January signed an executive order to establish health care cost benchmarks in Connecticut. That effort will be overseen by the state Office of Health Care Strategy, which also recently launched the Health Care Affordability Index. That index tracks and measures residents’ ability to pay for premiums and out-of-pocket expenses.
“The conversation around affordability needs to be had,” Halpin said. “We need to be focusing on the unit cost of care, whether it is what it should be.”
New state legislation that already went into effect, or will go into effect in January, have also been factored into the 2022 rate requests, Kelsey said, but to a smaller degree than cost trends.
One law will expand coverage for diabetes management.
“And that’s requiring us to cover certain supplies and monitors and things like that and not pass along as much of that cost to the individuals who need that,” Kelsey said.
All 15 rate request filings are open to public comment. The state Insurance Department is expected to make final decisions in September after a public hearing.
Open enrollment for health insurance coverage in 2022 begins Nov. 1.
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