Insurance Department Approves Reduced Health Insurance Rate Hikes For 2025

The Connecticut Insurance Department (CID) approved a reduced rate hike for individual and group plans for 2025 on Friday, despite bipartisan pleas to reign in healthcare costs for residents burdened by a range of cost increases in their lives.

"Our priority is always the consumer. Our team of actuaries and professionals has carefully reviewed and appropriately reduced the requested health insurance rate increases for 2025," said Andrew M. Mais, CID commissioner in a statement. "While we've made progress in mitigating these increases, the challenge remains in addressing the root causes driving healthcare costs upward. Our objective is clear: to ensure that Connecticut consumers have access to a competitive health insurance market while managing costs effectively. The rates announced today reflect our commitment to protecting consumers from unsupported increases and ensuring that health insurance remains both fair and accessible in Connecticut."

While the rates approved by CID were lower than those requested by the insurance companies across the board, there was significant variation across the exchanges and plans. For individual plans on the exchange, Anthem Health Plans made an average increase request of 9.0%, and CID approved 6.4%. Connecticare Benefits, Inc. requested a 7,4% average increase, and received approval for 5.1%. ConnectiCare Insurance Company, Inc. asked for the largest average increase at 12.5%, and was allowed 11.8%. The plans cover just over 141,000 residents.

Only one company, Anthem Health Plans, is offering small group plans on the exchange. The company requested an average increase of 13.6%, and was approved for 9.2%, which will affect almost 38,000 residents.

For off exchange plans, ConnectiCare, Inc. offered the state's only individual plans and requested a 9.1% average increase. CID agreed to 7.8% for the 960 residents covered by the plans.

Off exchange small group plans saw the smallest increases. Oxford Health Plans (CT), Inc. requested an average increase of 5.1%, and CID reduced that to 1.6%. Oxford Health Insurance, Inc. requested an average increase of 8.9% and received 5.3%, while UnitedHealthcare Insurance Co. asked for an average increase of 9% and was approved for 5.4%. The plans cover approximately 20,000 residents.

While CID noted that it had reduced individual market rate increase requests by an average of 29% and small group market requests by 35%, leaders across the state called for more to be done to arrest the ever-growing costs of insurance in the state.

"I appreciate that the Insurance Department reduced the requested rate hikes, but these year-after-year increases remain simply unaffordable and unsustainable," said Attorney General William Tong in a statement. "They reflect the inability of insurers to negotiate provider reimbursement rates that are consistent with other measures of inflation in the Connecticut economy. I agree fully with Commissioner Mais that we need to address the root cause of these ballooning rates — the skyrocketing cost of healthcare. Insurers are not passive players in this broken dynamic — in fact, they profit from it. If insurers are unwilling or unable to effectively negotiate cost controls, we need to take a tough look at our incentives and our laws to force that change."

During a public hearing about the rate increases earlier in the month, legislators on both sides of the aisle were incredulous about the need for another round of insurance rate hikes.

"I am sure the providers are telling us what they believe the cause of the increase is. I am also highly skeptical of ConnectiCare's claim that COVID-19 related expenses will continue at the same level as in 2023, especially as none of the other insurers even mention this as a cost driver," said Rep. Holly Cheeseman, R-Niantic, in written testimony. "That aside, the explanations behind the increase in the cost of health insurance constitute a continuing blame game, insurance companies blame hospital chains and government mandates. Hospital chains blame insurance companies and drug providers. Drug providers blame pharmacy benefit managers. The people who get caught in the crossfire are the people who are paying for the premiums."

Senator Martin Looney, D-New Haven, wrote in his testimony that states across the nation abandoned their use of a statutory formula to set rate increases because of promises from insurers that they would be able to bring costs down with less regulation.

"Clearly, they have failed and the patients have paid the price," he said. "The insurers, the Pharmacy Benefit Managers (PBMs), the hospitals and the drug manufacturers all profit from the system at the expense of the patients who are the appropriate beneficiaries the system is supposed to serve. We need to change course and put the patient back in the center."

The insurance landscape in Connecticut has grown increasingly challenging. Earlier this year, Aetna and Cigna decided to leave the small group insurance market, fueling concerns that the small group market had entered a "death spiral" of growing costs and shrinking insurance options.

Open enrollment for the 2025 coverage year begins November 1.