State-regulated health plans to see double-digit premium increases

The 224,000 Connecticut residents covered by state-regulated health plans will see double-digit hikes in their premiums next year as insurers price in looming cuts to federal subsidies.

The seven companies offering health coverage got approval from the state's Insurance Department for increases averaging 16.8% for individual customers on the Access Health CT exchange to an average of 11% for small-group coverage.

That's much less than the companies wanted, Insurance Commissioner Andrew Mais said in announcing the new rates. The higher prices reflect upcoming cuts to federal subsidies for exchanges like Access Health CT, he added.

More than 90% of Access Health CT enrollees, about 139,000 individuals, get premium price breaks thanks to the federal subsidies, which were expanded during the COVID-19 pandemic and extended by the 2022 Inflation Reduction Act. Mais has argued that President Donald Trump's intention to let the expanded subsidies expire could cause thousands to drop coverage in the state.

"All of us -- regulators, consumers, and industry -- have faced unprecedented uncertainty this year due to the federal government's pending changes to health care coverage," Mais said in a statement.

The enrollment period for Access Health CT starts on Nov. 1, with residents urged to sign up for health coverage at the exchange's website, accesshealthct.com.

Insurers are anticipating major changes in the Access Health CT customer pool if the federal subsidies expire, and they have asked for higher rates to compensate, said Tricia Dave, insurance actuary supervisor at Connecticut Insurance Department. The higher prices are likely to cause healthier people to opt out of coverage, leaving insurers with sicker customers who use more health care.

Democrats have been attempting to use extending the subsidies as a bargaining chip this week in talks over averting a government shutdown, Politico reported on Thursday.

If Democrats succeed in making a deal to extend the subsidies, the exchange rates could come down if the Center for Medicaid Services agrees to re-open the process after the deadline, Dave said.

"If they do extend the subsidies at the last minute... we would want the rates to reflect the fact that the pool is now going to be more stabilized," Dave said. "We'll just have to wait for the roller coaster."

Connecticut Attorney General William Tong blasted the announced rate increases as evidence of an "utterly unworkable system" in a statement released on Wednesday.

"Too many families are drowning in these ballooning premiums, deductibles, coinsurances and copays," Tong said. "The insurers, the hospitals, the pharmacy benefit managers have zero incentive right now to negotiate lower costs for Connecticut families."

Tong added, "By the time these rate demands hit the Insurance Department for review, it's too late. It's an utterly unworkable system and it has to change."

Deadlines built into exchange plans under federal Affordable Care Act rules leave state regulators with little time for lengthy reviews and negotiation, said Wanchin Chou, chief actuary and assistant deputy commissioner at Connecticut Insurance Department.

This year's rate-review process was particularly difficult due to abrupt changes in federal policy and the potential impact of several court cases challenging Trump administration attempts to tighten enrollment rules.

"There were many, many uncertainties this year," Chou said. "It's making this review process more challenging."

Advocates stressed the potential impact of federal subsidy cuts as a serious risk to coverage for lower-income residents. The extended federal price breaks helped lower the share of Connecticut residents who reported they were unable to afford health care from 68% in 2019 to 20% in 2022, according to surveys by the Connecticut Healthcare Affordability Index.

"We know that many state residents struggle to afford their health insurance," said Tiffany Donelson, president and CEO of the Connecticut Health Foundation. "Improving affordability will require everyone in the health care system to work together to find ways to lower health care costs.

Donelson added, "Even as federal changes make it harder for Connecticut residents to access health care, our state leaders will have to continue to find ways to minimize the harm so that our state's health doesn't significantly suffer."