Anthem proposes 12.9 percent rate increase
http://www.ctmirror.org/story/13806/anthem-proposes-129-percent-rate-increase
Anthem Blue Cross and Blue
Shield, the state's largest health insurer and a favorite target of advocates
for more stringent regulation of rate increases, is seeking to raise premiums
by 12.9 percent next year for more than 45,000 individual-market customers,
including some whose plans were the subject of a controversial request that got
denied last year.
In the rate request, which
requires approval from the Connecticut Insurance Department, Anthem said the
need for the increase stemmed from rising claims costs, increasing use of
services by members, and state and federally mandated benefit changes.
An Anthem rate hike request
drew angry protest last year
"Anthem does not want the
cost of health care coverage to continue to increase," the company said in
a statement Friday. "Unfortunately the use of various high cost services
including hospital care, new technologies, other expensive diagnostic services,
and prescription drugs are increasing--and we owe it to our members to cover
those costs and ensure access to a broad network of providers."
"In filing our rate
application we were sensitive to the fact that individuals struggle to afford
higher premiums," it added.
Anthem has faced vocal
opposition to past rate proposals, some of which have galvanized lawmakers and
consumer advocates to push for more oversight of premium hikes.
The increase proposed this week
applies to plans that were the subject of a controversial request to raise
rates by 19.9 percent last year, which then-Acting Insurance Commissioner
Barbara C. Spear rejected after a
contentious public hearing, resulting
in no increase. The plans are considered "grandfathered," meaning
they do not have to meet some requirements of federal
health reform, including covering preventive services with no out-of-pocket
cost to the members and increased annual limits on benefits.
The rate request also includes
plans that were subject to double-digit rate hikes last year that drew anger
from consumer advocates. At the time, Anthem and insurance department said the
increases were necessary to account for new or expanded benefits required under
health reform.
Overall, the plans subject to
the proposed rate increase cover 45,624 people. Anthem has about 55,000 members
in individual plans in the state.
State Healthcare Advocate Victoria Veltri, who
opposed the request for a 19.9 percent increase last year, said she hadn't yet
reviewed the filing in detail Friday. But she said the size of the increase
appeared to be in line with others this year.
"I would say based on the
other filings that have been coming in this year, it's on par with the other
filings that have been coming in, in terms of overall percentage," she
said.
Insurance rate hikes have been
a hot topic among state policymakers in recent years, inspired in part by those
proposed by Anthem.
In June, legislators passed a
bill that would have required a new public forum process for proposals to raise
health insurance rates by 10 percent or more if the attorney general or healthcare
advocate requested it. Insurance Commissioner Thomas B. Leonardi, who
has the authority to hold a public hearing on any rate request, opposed the
bill, as did the insurance industry. Gov. Dannel P. Malloy
vetoed it.
In July, the Malloy
administration, Leonardi, Veltri
and Democratic legislative leaders reached a compromise under which Leonardi agreed to hold up to four public hearings at Veltri's request on proposals to raise rates on individual
or small group HMO plans by 15 percent or more.
The insurance department has
received and posted four individual market rate requests in the past month,
none of which exceeded 15 percent. Golden Rule Insurance Company is seeking to raise premiums
2.4 percent over four quarters, or 14.3 percent over the year, and a 9.9
percent increase for pharmacy benefits for more than 11,000 members.
Separately, the company requested a 3.4 percent
quarterly raise--14.3 percent for the year--for 5,235 customers. Celtic
Insurance Company requested to raise premiums
for 376 people by 3 percent per quarter for individual major medical policies
beginning April 1, 2012, a total of 9.3 percent over the year. Globe Life and
Accident Insurance Company requested a 9 percent
premium hike beginning in December for one policyholder.
The insurance department is
accepting public comments on each request, including Anthem's.
In Anthem's individual-market
rate request, John Bryson, actuarial director for individual product pricing,
wrote that claims costs are projected to continue to rise at nearly 8 percent
through next year. He also attributed a 0.53 percent increase in claims costs
to benefit mandates that took effect this year or begin in January, including a
federal requirement that children up to 26 be eligible for coverage on their
parents' plans, a state requirement that oral chemotherapy be covered with the
same cost-sharing as intravenous chemotherapy, and a state law prohibiting
health plans from requiring people to use alternative prescription pain
medications before using one prescribed by a doctor.
Bryson also wrote
that the rate increase was lessened by 1.5 percent because of changes in
administrative expenses, plan mix, medical loss ratio requirements and
"other actuarial impacts." Medical loss
ratios are the percentage of premium dollars that are spent on medical care;
under federal health reform, insurance companies must now spend at least 80
percent of premium dollars on medical care or quality improvement efforts in
individual-market plans. If they don't, they must issue rebates to customers.
Anthem expects the policies
covered by the rate request to meet the medical loss ratio requirement.
In its statement, the company
that the rate increases "represent an economic reality faced throughout
the entire country" and said it was committed to controlling costs and
improving health.
"We promote wellness for
our members and communities-and we work with health care providers to encourage
high-quality, evidence-based care, which costs less over time," the
statement said