Insurance Regulators Approve Double-Digit Rate Increases
HARTFORD, CT — Without any guarantees from Washington, Connecticut’s insurance regulators decided to allow two carriers to boost their premiums for plans on the individual market in 2018 by an average of 31.7 percent for Anthem and 27.7 percent for ConnectiCare Benefit customers.
The increases approved assume that Cost Sharing Reduction (CSR) payments — which go to insurance companies to offset deductibles and co-insurance for lower income individuals — won’t continue.
Insurance Department officials said that if there was a guarantee that the CSRs would continue, the approved rate increase for ConnectiCare Benefits would have been 16.8 percent, instead of 27.7 percent, and for Anthem Health Plans it would have been 24.7 percent, instead of 31.7 percent.
“The Department has made its rate determinations for 2018 to provide certainty for Connecticut consumers, the insurance market and Access Health CT to be ready for the individual market open enrollment period which begins November 1, 2017,” Insurance Commissioner Katharine Wade said. “The increase in rates for the Silver exchange plans will be mitigated for consumers, eligible for federal tax credits, because they will be offset by the increase to tax credits for 2018.”
The federal tax credits will increase for customers who would have traditionally been subsidized through CSRs.
The two insurance carriers received about $50 million a year in CSRs for 46,000 of the 98,000 exchange customers. About 25 percent of the 98,000 exchange customers receive advanced premium tax credits and 25 percent receive no financial assistance.
Insurance regulators determined that medical costs increased an average of 10.5 percent and the elimination of the moratorium on the health insurance tax increased premiums an average of 3 percent. The average increases assumed for the elimination of the CSR payments was 16.7 percent, and it’s applied only to the silver plans on the exchange.
“This has been a challenging year for all involved due to the uncertainty about federal funding for the Cost Sharing Reductions (CSR) payments and individual market stability challenges. CSR payments are important financial relief for consumer out-of-pocket costs,” Wade said. “We continue to work with the Malloy administration, our congressional delegation and fellow insurance regulators on solutions that will provide certainty on CSR funding and stabilize the market for our citizens.”
Connecticut officials, including Wade and Access Health CT CEO James Wadleigh, have reached out to members of Congress to make suggestions about what can be done to stabilize the individual marketplaces.
The federal government could guarantee the CSRs, enforce the penalty people are supposed to pay if they choose not to purchase insurance, or create a “national reinsurance pool,” Wadleigh has said.
At the end of September, Republicans will no longer be able to pass a repeal bill in the U.S. Senate with 50 votes. U.S. Sen. Chris Murphy speculated earlier this week that they will try once more to repeal the Affordable Care Act, also known as Obamacare, but those attempts will be made harder by the progress the Senate Health, Education, Labor and Pensions Committee is making on a bipartisan package of reforms and fixes.
Murphy said the goal within the several days is to come up with a small package of reforms that can pass the Senate and send a message of stability to the insurance markets.
Gov. Dannel P. Malloy and Lt. Gov. Nancy Wyman announced earlier today that the two insurance companies had decided to participate in 2018.