CT health insurance costs are out of control, commissioners say as insurers seek increases again

Alison Cross, Hartford CourantHartford Courant

During a heated public hearing, the Connecticut Insurance Department weighed arguments for and against proposed health insurance hikes that would increase insurance rates for thousands of Connecticut residents on state-regulated health care plans.

Representatives from Anthem Blue Cross Blue Shield, ConnectiCare and UnitedHealthcare testified before the department Tuesday, defending their proposed increases that would raise rates on individual insurance plans by an average of 8.3% and small group plans by 11.9% next year.

If approved by the department, the proposed hikes would raise rates for 199,789 residents covered under individual and small group plans, according to filing data from the department. The Connecticut Insurance Department does regulate plans provided by large employers or Medicare or Medicaid which are regulated by the US Department of Labor and cover the bulk of insured residents in the state.

Commissioner Andrew Mais said the department is "currently conducting actuarial reviews of each filing" and "will decide whether to approve, reject, or modify the request" in September.

"We are an agency that follows the law to the letter, and the only standard under law that we can use to evaluate the rate requests are that these requests must not be excessive, inadequate, or unfairly discriminatory," Mais said.

Last year, Mais said the department approved a 12.4% average increase in individual rates and a 14.8% average increase in small group rates. In 2025, insurance carriers are requesting rate increases ranging from 2.9% to 18.8% for small group coverage, and 4.3% to 18% for individual plans on and off the state's health insurance exchange, according to rate filings.

Brandon Rousseau, the sales director for Anthem, which covers more than 50% of the individuals who would be affected by the proposed rate changes, said the requested increase for 2025 is the result of growing medical and pharmacy costs, increased behavioral health utilization and "the ever-increasing number of more expansive mandates and assessments that are being passed," by the state.

"The (Connecticut Business and Industry Association) estimates that Connecticut residents pay an additional $2085 in treatment costs because of the state's 68 health benefit mandates," Rousseau said. "For Anthem, these requirements equate to 5% to 6% of our 2025 premium request."

"The (Affordable Care Act) contains a provision that the state general fund will pay for any mandates that are not contained in the essential health plan," Rousseau added. "Connecticut has never enforced this."

State Sen. Tony Hwang, the ranking member of the Insurance and Real Estate Committee, described the rising health care costs as "unaffordable, unsustainable and, and an incredible burden on the consumers and the constituents that we represent."

"I've been coming to these meetings for the past 10 years, and every single year it is a rate increase," Hwang said.

Hwang criticized the insurance carriers for setting rates that focused on the "cost of health care delivery, not the profits (carriers) make in other parts of (their) business."

"I struggle with that straight passthrough to the consumer in regards to health care costs when other parts of your business benefit," Hwang said. "(Connecticut consumers) are compromising food on the table and benefits that they need to take care of (themselves) in order to pay for health insurance they hope they never use."

Office of Health Strategy Commissioner Dr. Deidre Gifford said the proposed rates far exceed the health care cost growth benchmark the state created to "slow the growth of health care spending and make health care more affordable for the residents of Connecticut."

While insurance carriers, on average, are requesting an 8.3% rate increase for the individual market, Gifford said Connecticut's 2025 benchmark, which is based on projected growth in the state economy, household income and inflation, was 2.9%.

"These increases are between three and four times what the state has set as a target for per-person growth in 2025," Gifford said.

Gifford said the growth in health care costs is driven by price, namely increases in pharmacy spending and hospital price growth paid by insurance carriers.

"Health care prices in Connecticut are significantly higher than in the rest of our neighboring states and around the country," Gifford said. "Health care prices in Boston are about 9% above the national median. In Providence, they're about 5% below the national median. In Hartford, New Haven and Bridgeport, they're 17%, 22% and 28% above the national median respectively."

Gifford explained that in Connecticut, there is a "tremendous variation" between the "break-even" point for hospitals and the commercial payments they receive from insurance carriers. Compared to rates for Medicare, Gifford said insurance carriers end up paying Connecticut hospitals 185% to 340% more in commercial payment rates.

Assistant Attorney General Thomas Ryan said these prices, which are often cited as a contributing factor necessitating an insurance rate increase, are set through negotiations between insurance carriers and health care providers.

"We call it medical cost but really what it is is a negotiated medical cost," Ryan said. "(Insurance carriers) are the only entities in the room other than the providers that negotiate these rates...It's remarkable I guess, under those circumstances, that we haven't seen a change."

During the hearing, officials pressed insurance representatives on whether carriers would be open to state intervention in negotiations with the hospital systems.

"Do you need the state to put a cap in place? Do you need the state to oversee those negotiations?" Ryan asked. "You guys are telling me that you're not able to negotiate lower costs. ... I've been here since 2009 and we've been talking about it every year, so what needs to change?"

"Commissioner Mais is asking it, everybody's asking it. Everybody wants to know and we have to do something because it is unsustainable," Ryan added. "The cost shifting that happens in these plans is making them unaffordable except in the marketplace, maybe where there are tax credits, but for people in the middle, they're getting slammed. So what's the answer?"

ConnectiCare President Paul Meador said insurance carriers engage in strong and aggressive negotiations.

"I don't want people to leave this room thinking that we're not negotiating as tough as we can with these hospital systems and the pharmaceutical (companies)," Meador said. "To really address some of these issues, we got to go beyond the insurance carriers. We got to really get all the players in the ecosystem involved. We got to deal with the hospitals directly, not just through the insurance company. We have to deal with the pharmaceutical companies who are charging significant costs and prices because of their power, their patent power."

Mais said the health care costs in Connecticut, are "always a little disconcerting to see."

"We have a fabulous health care system, but...the prices for health care in Connecticut so exceed the prices for health care in various states, and we do need to address those prices in order to be able to address insurance premiums," Mais said.

In a statement after the hearing, the Connecticut Hospital Association said "everyone, including the health insurance industry," must work "together to slow the rate of health care cost growth."

"The effects of historic inflation on families and caregivers alike, Medicaid rates not covering the cost of care, and burdensome insurance practices like prior authorization that add cost and delay care remain significant and force caregivers toward higher commercial payments," CHA said. "Addressing rising commercial health care costs will require action to eliminate national health insurance company administrative practices that raise costs and ensuring that the state Medicaid program pays rates that actually cover the cost of care."

According to a 2022 survey, Gifford said 78% of Connecticut residents worry "about their ability to afford health care expenses in the future," 33% currently struggle to pay their medical bills, and 46% "are delaying or foregoing care because of cost."

Gifford said she keeps the latter statistic on a sticky note attached to her computer monitor.

" Most of my work is still informed by the days of me sitting in the exam room with patients, and one of the hardest things that a doctor ever has to do is to sit down with a patient and try to help her understand what things she can forego because she can't afford them, what things that the professional thinks would be important for her health that she can put off, and what is essential," Gifford said.

"The fact that 46% of people in Connecticut, one of the wealthiest states in the country, are foregoing or delaying care because they can't afford it, it keeps me up at night," Gifford added. "It's not an acceptable state of affairs in our state."

Debra Dauphinais, a local business owner who testified against the rate increases during the public comment portion of the hearing, said she has paid as much as $10,000 for a $6,500 deductible.

Dauphinais said the high rates keep her from accessing healthcare if she is "sick or in pain."

"I have no access to affordable healthcare for myself or for my employees," Dauphinais said in her comments before the Insurance Department. "Every year, the insurance companies ask for rate hikes, I testify against it, they get an increase and they use these rate hikes to increase shareholder and CEO profits not to help your constituents."

"It is not a success to give them less than they asked for," Dauphinais added. "It is only a success if you give them no increase at all. I ask you to say 100%, 'No.'"