State Insurance Commissioner Andrew Mais said Tuesday that the recently approved 13 percent for individuals and 8 percent for small groups insurance is needed because the cost of medical care and prescription drugs continues to rise.
Cigna and ConnectiCare, which covers about 116,000 people in Connecticut, asked for a 25 percent increase on July 20, respectively.
At a public hearing in August, representatives of ConnectiCare said the company lost $65 million last year in the insurance market. They said the losses were due to earlier refusals by the state insurance department to increase rates.
The department reduced initial requests from an average of 20.4 percent to 12.9 percent for individuals and from 14.8 percent to 7.9 percent for small groups.
“We have to make sure the carriers can pay off the debt when it comes,” Mais said Wednesday morning, adding that one supplier in the Connecticut market left the state “after years of trying” to pay what was owed. The company, HarvardPilgrim, will no longer offer plans in the state as of January 1, 2023according to the Hartford Business Journal.
Jim Watson, a spokesman for the department, told the CT Examiner that HarvardPilgrim said Connecticut is a “difficult market” to provide reimbursement while being able to cover the prices doctors and hospitals charge.
Mais said the department is trying to convince insurance carriers to offer plans in Connecticut.
“My personal opinion is that we need more competition in this market,” he said.
The Deputy Commissioner of Insurance, Paul Lombardo, said that the cost of care for patients in the hospital and patients has increased by 8 to 10 percent, and that the cost of buying medicine has increased between 10 and 12 percent. He also said that many people are seeking medical help, especially for mental health. Lombardo also said that people seeking care are sicker than in previous years.
“We believe that this is a direct result of people delaying their care during the height of the epidemic,” Lombardo said.
According to Mr. Watson, the number of people using health care has increased by 10 percent in the past year. In general, he said, the number of people using the same services increases three percent a year.
Lombardo said insurance companies also have to deal with the cost of paying for the COVID-19 vaccine and supplements. Until now, the government has covered the cost of the vaccine, but companies may have to pay for it themselves in 2023.
The median wage in Connecticut is $581 for individuals and $20,735 for employers in 2022.
Mais said federal subsidies created by the American Rescue Plan Act, which were recently extended through 2025, could reduce the number of people who get insurance on Access Health CT, the state’s exchange.
With the combination of federal aid and the mandatory rate, Lombardo said a 40-year-old making about $40,000 a year who gets their insurance on the state exchange through ConnectiCare will pay about $10 a month. A 40-year-old man who makes about $68,000 a year with ConnectiCare insurance pays about $25 more a month.
FiercePharma report in August that most of the country’s health insurance companies reported that they will be profitable in the first half of 2022. UnitedHealth, which requested a 13.9 percent increase in costs and was approved for an 8.4 percent increase in Connecticut, made a profit of $10.1 billion from January to June . of this year. During the same period, CVS/Aetna made a profit of $5.2 billion, Elevance, which owns Anthem, made $3.5 billion and Cigna made $2.7 billion.
Mais stressed that the department has reduced the profit of insurance companies to 0.5 percent this year, down from the 2-3 percent that is allowed.
“At this department, what we wanted to do was to make sure that we are all committed, including the insurance companies,” he said.
In a statement released Tuesday afternoon, Republican Senators Kevin Kelly, R-Stratford, and Tony Hwang, R-Fairfield, criticized Lamont’s administration for not adopting the proposals of Republican lawmakers to reduce health care costs.
“The Governor’s administration approved double-digit increases at a time when working and middle-class families are already struggling with inflation. Now the Governor’s administration is talking about ‘shared sacrifice.’ The people of CT are already committed,” Kelly and Hwang said in a statement.
Asked what will happen after federal aid ends in 2025, Watson told the CT Examiner that the insurance department was “very concerned about the cost of health insurance in Connecticut” — an issue he also linked to the cost of health care services.
The Department of Insurance, together with the Office of Healthcare Strategy and the Office of the Healthcare Advocate, will provide information on the cost of healthcare on October 3. Lombardo said that this will give them the opportunity to ask detailed questions of “stakeholders” such as healthcare companies, hospitals and pharmaceutical companies.
“The one promise I can make to you as commissioner … we will not stop working,” Mais said.