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Review of Insurance Rate Changes – InsuranceNewsNet

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In the midst of a public hearing last summer, after several insurance companies offered double-digit rate increases on their health care plans, the attorney general Guillaume Tong posed a series of questions that summarized the concerns of many gathered at state headquarters Legislative Assembly Headquarters Building That day.

‘I understand that an actuarial analysis is undertaken to ensure that an insurance company has sufficient assets to pay its debts, correct? This is what the analysis shows: ‘ Do you have enough money to pay the claims?’” he asked.

“That’s a consideration, yes,” replied Neil Kelseyvice president and chief actuary of ConnectiCare.

“Do you also do an analysis to see if your customers have the ability to pay your premiums? Tong pressed.

“From an actuarial perspective? That’s not a consideration,” Kelsey said. “When we set rates, our rates cannot be excessive, they must be non-discriminatory, and they must be adequate. These are the three stipulations or thresholds that the actuarial analysis must meet.”

State Representative Kate Farrara West Hartford Democrat, followed up with a challenge to the state.

“I hear from the same nonprofits and small businesses in my district who struggle every year to provide essential health care benefits to employees,” she said. “I would encourage that we use a measure of consumer affordability as a central part of the insurance service rate review process.”

Every year, when insurers offer rate changes for on- and off-the-shelf state health plans, Connecticut the insurance department has the power to approve, reject or modify them. The department assesses trends in unit cost (the total expenses incurred by the business), service utilization and expected severity of claims. Rates cannot be excessive, insufficient or unfairly discriminatory.

Now advocates, elected officials and consumers are calling on them to add an affordability measure to the list.

This year, insurers asked the state to approve an average price increase of 20% on individual health plans, a request far greater than any proposed in recent years. By contrast, they sought an average hike of 8.6% in 2021 and 6.3% in 2020. The state has approved an average increase of 13% this year, though the cost of some plans will increase by as much as 25%.

“We asked lawmakers to require Connecticut Department of Insurance consider affordability for consumers and small businesses when reviewing rate applications,” said Lynne IdeProgram Manager for Communications Outreach and Engagement Connecticut Universal Health Care Foundation. “The department told us every year, ‘Look, we don’t have to do this legally.

“We always think about how state policy affects everyday people. The biggest complaint people have about health care is the cost and the sustainability of that cost.”

Lawmakers frustrated with the demand for high rates this year say they plan to introduce a bill during the legislative session that begins in January that would change the state’s rate review process to include affordability of consumers as the norm.

“I would be really interested in an overhaul of the rate review process, including looking at affordability,” Sen said. Matthew LeserD-MiddletownInsurance Co-Chair and Real estate committee. “I don’t think we should be afraid of a more adversarial system. I think we should reimagine what this process looks like.

“Even though we have made progress in reducing our uninsured rate, there is still a significant portion of our population that is uninsured and a larger percentage that is underinsured – people who have insurance on paper but who can’t afford to access coverage when I never understood why we would want to ration care based on people’s ability to pay.

Sen. Saud AnwarD-Windsor Southa vice chairman of the insurance committee, said he would also support a change to the rate review process that would include adding affordability.

“I feel there is urgency because every day we don’t make it an obligation, insurance companies are raising prices,” he said. “As those prices go up, more and more people can’t afford it.”

While drafting a bill, Lesser said he would keep the safety and solvency of insurance companies as a consideration in the review process. “We shouldn’t back down from this,” he said. “But they can also look at affordability.”

Andrew But, Connecticut insurance commissioner, defended the state’s review process and praised his department’s work over the years.

“We are working diligently to make sure that the people of Connecticut don’t pay more for health insurance than they should,” he said in a statement. “We saved our state’s consumers $365 million over four years by scrutinizing and reducing rate requests.

“We agree that the underlying and rising cost of health care must be addressed. That is why we are working with the Governor’s Office and the Health Care Policy Group on proposals for the next legislative session to reduce the growth in the cost of health care.”

He did not give details on the proposals that could be presented during this session.

Some lawmakers have said the rising cost of medical care should be the focus of legislative reform, not the insurance department.

“We need to put pressure on the cost drivers, not the people covering the people,” Rep. Kerry WoodD-rocky hill, co-chairman of the insurance committee. “I feel like pressuring the insurance department in how they regulate plans completely ignores the main factor, which is the cost of health care.”

But for Lesser and others, the tariff review process is central.

Lesser said he would turn to the state Office of Health Strategy determine how affordability could be defined in the bill. This year, OHS developed a tool called the Health Care Affordability Index, which uses several factors, such as type of insurance, family size, health status and age, to determine costs and affordability of health care.

The bureau also recently began setting annual benchmarks for the inflated cost of health care – requiring providers, insurers and other industry players to declare their annual price increases.

The program is designed to expose hospitals, medical practices and insurance companies whose costs exceed state-mandated targets. There is no penalty for those who exceed benchmarks, but officials say the annual reporting mandate would create public pressure to cut costs.

OHS also tracks annual primary care spending and sets targets for this.

“OHS considers affordability of health care to be essential for the health and outcomes of Connecticut residents, as well as the longevity and effectiveness of Connecticut health care system,” Tina Hydea spokeswoman for the office said in a statement.

At least one state considers affordability in the insurance department’s annual rate review process: Rhode Island.

When assessing affordability, officials from Rhode Island review trends, including historical rates of existing products and national and regional health insurance trends; inflation; insurers’ efforts to control administrative costs; the ability of low-income residents to pay for health insurance; price comparisons with other market rates for similar products; and insurers’ strategies for increasing affordability, according to an analysis of Connecticut Office of Legislative Research.

Rhode Island the insurance commissioner also reviews state and federal requirements such as benefit mandates; costs of medical services over which the plans have limited control; the third-party payment system and the resulting reduction in consumer price sensitivity; and health plan solvency.

To determine whether tariffs are affordable, officials check whether insurance companies have met primary standards: increasing primary care spending, meeting certain quality of care and payment provisions, including an inflation cap on medical expenses when contracting with hospitals, financially supporting the exchange of health information and the adoption of a patient-centered medical house model (places where consumers can receive treatment from various specialists arranged through their primary care physician).

Ted Doolittle, Connecticut health care advocate, said he believes state policy already allows the Department of Insurance to weigh affordability when approving or rejecting annual rates.

“I always thought that an aggressive, consumer-focused administration could start looking at the issues of consumer affordability and underlying pricing right now,” he said. “Historically, they haven’t. Insurers – who have a lot of influence over the insurance department, rightly so in many ways – have no interest in going that route, for obvious reasons.”

Doolittle said he would support a bill that would make affordability a standard in law.

“We live in a high-deductible world where almost everyone has to pay for all of their non-preventive care,” he said. “A generation ago carriers were on the hook starting with one dollarbut now carriers literally have no skin in the game until i pay off my deductible.

“Since Connecticut families have to pay the first thousand dollars of medical bills, [they] have the right to understand exactly what price was negotiated on their behalf and why. »

Jenna Carlesso is a reporter for The Connecticut Mirror (https://ctmirror.org). Copyright 2022 © The Connecticut Mirror.