Connecticut slashes health insurance rate hikes, keeps costs ‘essentially flat’ for policyholders coping with recession and COVID-19

Connecticut health insurance policyholders, reeling in a recession caused by the coronavirus, are getting a break in 2021 rates, due partly to reduced use of health care services in the pandemic.

The state Insurance Department announced Friday it cut requested rate increases for individual plans marketed on the state’s health insurance exchange, keeping costs “essentially flat,” with an average rise of 0.01%. That was down from the average requested increase of 6.3%.

For small group plans, or employers with 50 or fewer workers, the average approved increase is 4.1%, down from more than 11.3% requested on average.

About 214,600 consumers could expect to save $96 million, the Insurance Department said.

Regulators said they reduced the upward trend in health care costs that insurers project at 8.8% this year and in 2021 as prescription drug costs rise and demand increases. The Insurance Department said it blunted the rise to reflect reduced use of services, including elective procedures, in the first half of this year due to the pandemic and the projected impact of COVID-19 in 2021.

“Working on behalf of consumers, the department was able to reduce the health insurance rate increase requests thanks to the hard work of our actuaries and professional staff,” Commissioner Andrew Mais said.

“Rates for individual plans were held essentially flat,” he said.

Anthem Health Plans Inc. sought a 9.9% average increase in its on-exchange individual plans. The state pared it to an average 1.9%

“Rates are based on what medical costs are anticipated to be a year from now, which is made more challenging given the still evolving COVID-19 pandemic,” Anthem said in an emailed statement. “We are working to evaluate the impact of this decision during this time of unprecedented uncertainty.”

The Insurance Department last year approved an average increase for individual health insurance plans of 3.7% from an average request of 7.9%. Regulators also approved an average increase for small group plans of 9.2%, down from the requested average of about 12%.

Stephen Singer can be reached at [email protected].

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