Gov. Lamont: Even as health insurance rates climb by double digits, more government is a ‘Band-aid’ [Hartford Courant]

Gov. Ned Lamont on Tuesday ruled out support for a bigger government role in health insurance, four days after the Connecticut Insurance Department approved sharply higher rates for nearly 190,000 residents.

Fellow Democrats have tried in the General Assembly to enact a so-called public option that would allow Connecticut residents to buy insurance from a state plan. It has failed several times after running into opposition from the industry and Lamont.

As recently as Friday when the Insurance Department announced 2023 health insurance rates that, despite being scaled back by regulators, are up substantially for most plans, Sen. Matt Lesser, co-chairman of the General Assembly’s Insurance Committee, repeated his call for a public option. The Middletown Democrat said it will “bring down costs and increase competition.”

At a news conference at the Capitol Lamont called it a “Band-aid.”

“It doesn’t make a difference compared with what we’ve got to do to deal with the underlying costs,” he said.

The Insurance Department on Friday approved double-digit rate increases next year for nearly 121,000 covered lives — health insurance subscribers, beneficiaries and plan members — on eight of 13 insurance plans on and off Connecticut’s Affordable Care Act Exchange.

About 66,000 people in three insurance plans will pay rates higher than last year, but short of double-digit increases. And health insurance costs will remain flat or were cut for about 20,000 subscribers, beneficiaries and others on two plans.

The rate hikes drew quick condemnation from health care advocates and Democrats and Republicans. Lamont, seeking a second term in November, said he was shocked by what he called “outrageous” rate requests.

Lamont urged consumers to take advantage of the federal Inflation Reduction Act that extends subsidies through 2025, limiting individual health insurance premiums to no more than 8.5% of a family’s income.

His social services commissioner, Deidre S. Gifford, and the Office of Health Strategy’s acting executive director Kimberly Martone highlighted ways to limit rising health care costs.

They cited benchmarking that allows consumers and others to monitor hospital costs and performance; price caps on insulin that Lamont signed into law; efforts the governor supports to set pharmaceutical price caps in law; and other proposals the officials say will help limit health care cost increases.

Regulators, pointing to steadily rising medical and prescription drug costs, faced rate increase requests by carriers that were higher for 2023 than last year’s proposals for 2022. Carriers in 2021 sought an average increase of 8.6% on individual plans and 12.9% on small group plans.

Requests this year by carriers in the individual market were reduced by the Insurance Department to an average increase of 12.9% from 20.4%. In the small group market, premium increases were pared to an average 7.9% from 14.8% sought by insurers.

Insurance Commissioner Andrew Mais said on an online news briefing that by limiting health insurers to a profit margin of 0.5%, regulators ensure a price paid by everyone, not just consumers. It may be seen by businesses as “almost no profit and that may not be tenable in the long run,” he said.

“But again, this is a time for shared sacrifice,” he said. “As a department what we wanted to do was to make sure that we all sacrifice, including the insurance companies.”

Paul Lombardo, director of the Life and Health Division of the Connecticut Insurance Department, said regulators decided last year to limit to 3% profit and risk margin of carriers. “This year we took it one step further and limited it to half a percent,” he said.

By doing so, the Insurance Department reduced administrative expenses that contributed to a reduced premium, Lombardo said.

A spokeswoman for insurance carriers did not immediately respond to a request for comment.

Health insurance increases are tied directly to rising medical and pharmaceutical costs, the Insurance Department said. Medical costs are up 8% to 10% next year and are increasing by 1-% to 12% for prescriptions.

The pandemic also is to blame, regulators said. Mental health services have been in higher demand following the public health crisis, providers have confronted more severe health problems as a result of delayed procedures and diagnostic testing and costs are higher due to COVID-19 treatment, testing and vaccinations.

The Insurance Department warned that prices could increase again if the federal government shifts the cost of COVID-19 vaccines and boosters to private insurers and the commercial market next year. The federal government now buys the vaccines and boosters and private insurers pay providers for administration.

Stephen Singer can be reached at [email protected].

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