High-deductible plans increase amid insurance debate

Aug. 12--As U.S. Sen. Richard Blumenthal pressed Connecticut regulators last week to be wary of short-term insurance plans authorized by the Trump administration -- "junk plans" in his words -- a new study shows people continue to sign up for plans that require them to pay higher deductibles before triggering claims payments in exchange for lower monthly premiums.

Enrollment in high-deductible health plans climbed again last year, now accounting for 43 percent of all policies in the United States from 15 percent of insurance policies a decade ago, according to a Thursday study by the Centers for Disease Control and Prevention.

Nearly 44 percent of high-deductible plans last year included health savings accounts through which policyholders socked away extra money to help pay for deductibles or other fees and costs, CDC determined.

The U.S. House of Representatives is currently considering several bills introduced last month that would buttress the rollout of health savings accounts, including increasing limits on contributions.

Webster Financial is among the banks that has been aggressively offering employers nationally health savings accounts through its HSA Bank subsidiary, with the Waterbury-based bank among the seven largest depositors in Fairfield County. In a July conference call, CEO John Ciulla said employers using HSA Bank are picking up the tab on about $4 of every $10 deposited in health savings accounts, with the remaining 60 percent footed by workers.

"If there's a battle, it's probably on that 40 percent that the company is paying," Ciulla said.

'No better than a security blanket'

Heading into the fall elections, ample uncertainty is seen over the future of the Affordable Care Act, with the President Donald Trump jettisoning penalties going forward for individuals who choose not to purchase insurance. Obamacare backers warn that will lead some young, healthy people to skip coverage, raising costs for others as a result of the loss of those premiums.

Two weeks ago, the Kaiser Family Foundation released a study of the individual health insurance market that showed enrollment dropped 11 percent nationally to 15.2 million people. The foundation tracked declines both through state exchanges like Access Health CT that steer people to limited sets of plans, as well as in the private-sector market.

The same study found that enrollment in state exchanges increased in the first quarter of 2018 compared to a year earlier, however, with the Kaiser Family Foundation describing exchange enrollments nationally as "largely stable."

Trump is now exploiting an ACA loophole to encourage insurers to create one-year health plans with limited coverage and an allowance for up to two renewals, with the Federal Register publishing its final rule on the plans entering August after U.S. agencies received about 12,000 comments.

Designed initially as gap insurance coverage for individuals between jobs, short-term plans are allowed to dispense with some of the main tenets of Obamacare such as guaranteed availability, coverage of essential health benefits and prohibiting exclusions for preexisting conditions.

The measure prompted Blumenthal, D-Conn., this past week to urge the Connecticut Insurance Department to follow the lead of New York, New Jersey and Massachusetts in restricting or banning outright such health plans, with he and Sen. Chris Murphy, D-Conn., having introduced legislation in March to force carriers to include people with preexisting conditions under short-term coverage.

"They are no better than a security blanket -- providing a false sense of safety while offering little real protection," Blumenthal wrote in a letter to the insurance department. "One (Kaiser Family Foundation) study found in Connecticut that no short-term plan covered maternity care and nearly half did not cover prescription drugs."

Premium hikes trend down

As of this week, the Connecticut Insurance Department had received rate filings for 2019 covering nearly 300,000 people enrolled in individual and small-group plans. On average, carriers requested a 12.3 percent increase for next year's individual plans, slightly less than half the average increase they had sought for 2018. Small group plans would increase 10.2 percent on average, a substantial decline from the 18.1 percent average increase a year ago.

Anthem and ConnectiCare are returning to offer coverage through Access Health CT, which added more than 13,400 new members this year to give it above 114,000 in total. ConnectiCare is seeking a 13 percent increase on average for some 63,000 residents who it covers through Access Health CT; Anthem wants a 9.1 percent hike for about 45,500 people enrolled in its Access Health CT plan.

The Insurance Department is collecting public comment on the rate filings through the third week of August, with a public hearing scheduled Sept. 5. Open enrollment begins in Nov. 1, with ConnectiCare and Anthem having yet to indicate whether they will stick with Access Health CT in 2020 and beyond. In a July conference call, Anthem CEO Gail Boudreaux told investment analysts the company is pleased with the participation and results it is seeing to date in state exchanges nationally.

"Our team has done an excellent job of identifying the markets where it makes sense, where we think that we've got a stable presence and offering," Boudreaux said. "It is all about stability and more certainty around that marketplace -- but again, this year was solid."

[email protected]; 203-842-2545; @casoulman

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