Insurance Hikes Debated At Public Hearing
by Christine Stuart | Feb 25, 2010 6:02pm
(5) Comments | Commenting has expired
Posted to: Health Care, State Capitol
As public furor over increased health insurance premiums boils over across the nation, a bill that would require greater regulation and transparency in the rate setting process received a public hearing at Connecticut’s Capitol Thursday.
The bill proposed by the state Healthcare Advocate Kevin Lembo and Attorney General Richard Blumenthal was inspired by Anthem’s proposed 22 to 30 percent rate request last summer . After Lembo and Blumenthal intervened in that matter, Anthem received 13 to 20 percent increases for its 56,000 policyholders.
The Connecticut bill would require the Insurance Department to hold public hearings for all rate requests and allow consumer advocates, like Lembo and Blumenthal, to appeal the final decision in court. It would also require the department to approve, deny or modify the request, and require it to mandate rates that are “reasonable” for consumers.
“There is no justification for many of these rate increases,” Blumenthal said Thursday at a press conference prior to the public hearing. “At the root of these spiraling rates, on average last year of 20 percent, is a regulatory system that is virtually broken and dysfunctional.“
With this bill the burden of proving the need for a rate increase will fall on the insurance companies, Blumenthal said.
Sen. Ed Meyer, a Democrat from Guilford, said a recent report found that the Insurance Department approved 19 out of 23 rate increases.
“We need dramatic change,” Meyer said. “ I have no confidence in the governor or the General Assembly to make these changes.”
Lembo likened the change in regulatory structure to that of the utility markets where regulators have to approve rate increases before they’re passed along to consumers.
It should come as no surprise that the insurance industry and the state Insurance Department oppose the bill.
David Fusco, president of Anthem Blue Cross and Blue Shield of Connecticut, agreed to testify on the bill, even though he refused to answer some questions posed by lawmakers because he didn’t want to “politicize” the process. He didn’t want to talk about market share and refused to comment on remarks made by Anthem’s CEO to Congress.
He said the health insurance rates have increased over time to reflect the rising medical costs and services provided to its customers. He said he thinks the current process works well and gives the Insurance Commissioner broad discretion.
“The current regulatory framework provides for a thorough rate approval process that is time tested, and it should not be eviscerated simply because a prevailing political climate asserts that the approval of actuarially sound increases should be obstructed because they are higher than expected,” Fusco said in his written testimony.
In an interview following the press conference Thursday Insurance Commissioner Thomas Sullivan said he’s in favor of greater transparency, however, he doesn’t want to insert any subjective terms into the rate setting process. He said the rate review is done based on actuarial science and should not be manipulated in any way.
“I am confined to the facts and the facts are what guide me,” Sullivan said. “If Connecticut passed this legislation it would be the first in the nation to insert subjectivity…and this is not an area where you want to experiment.”
Proponents of the bill said they were open to discussions on the rate setting process, but Lembo warned that some of the criteria they are suggesting is not all that subjective. For example, in Rhode Island where the average increase was six percent it uses the consumer price index when considering rate increases.
He said Rhode Island with only 1 million people gained an insurance company last year.
“It’s not a market if it’s not open and not fully functioning,” Lembo said.
But Fusco and Sullivan said changing the rate setting process will force companies to leave the state.
“I believe there is a significant risk, after enactment, which will lead to a reduction in the number of health insurers writing individual health insurance in Connecticut,” Sullivan said. Currently there are eight companies writing individual major medical policies in the state.
Lembo said he’s optimistic something can be worked out.
Click here for our previous report on the legislation.
(5) Comments
posted by: Ellen Andrews | February 26, 2010 7:19am
It’s easy to make a subjective issue like affordability concrete in statute—just spell it out. We do it with HUSKY, the fed.s did it with CHIP. Other states have done it. There needs to be a constructive, collaborative, open process to decide what the standards are, then apply them. I know this would be new for CT, but we could try.
posted by: NOW What? | February 26, 2010 10:01am
I don’t blame Anthem one bit for opposing increasing state regulation and oversight of health insurance policies and premiums, especially given the craziness that’s going on in Washington right now over the very same issue.
The CEO of ConnectiCare is right on the money in recently stating that the bulk of the problems could probably be solved by simply doing away with the exclusion of pre-existing conditions, creating minimum standards of coverage for lower-cost policies, requiring all citizens to have at least that minimum level of coverage, and have the government simply provide subsidies to help indigents pay the premiums.
But for this to work and be do-able by the insurance companies, the policies, rules and regulations must be implemented NATIONWIDE, NOT state-by-state.
His comments also reflect the *fact* that the major health insurers are actually in FAVOR of health care financing reform, NOT against it, as it ill help ensure increased stability of revenue for them while simplifying and leveling their currently excessively competitive playing field.
The problems in healthcare financing can only be fixed effectively in WASHINGTON, NOT Hartford - or any other state capitol for that matter. And we need to tell all in Congress to cut the political baloney and GET THE JOB DONE ALREADY! It ISN’T “rocket science” for crying out loud!!
posted by: waterboarder | February 26, 2010 2:13pm
Hats off to our public servants being a year ahead of the curve.
posted by: DrHunterSThompson | March 1, 2010 8:08am
i agree with Senator Meyer, “We need dramatic change,” Meyer said. “ I have no confidence in the governor or the General Assembly to make these changes.”
the GA will accomplish nothing of real value without new leadership.
the gov, well .......... nevermind.
HST
posted by: middleoftheroad | February 25, 2010 8:34pm
The commissioner is wrong. There are many states with other factors considered that the commissioner would call subjective, but critically important. Let the sunshine in!