Two health insurance insurers that proposed rate increases of 20 and 25 percent

HARTFORD — In a lengthy public hearing Monday, lawmakers and officials — many of whom face elections in the fall — spoke out against plans by two health insurers to raise premiums by at least 20 percent next year.

ConnectiCare and Cigna, which cover about 116,000 people in the state, told the state Department of Insurance during the hearing that the respective increases of 25 and 20 percent reflect a combination of higher pharmacy and hospital costs and a continued recovery in demand after COVID-19 .

The two companies are asking for increases that are higher than their rivals at Anthem, Oxford Health, United Healthcare and Aetna, which are asking for average increases between 3.6 percent and 16 percent, depending on the market.

At the hearing, Attorney General William Tong argued that Connecticut’s proposed increases are among the highest in the nation. He said in Rhode Island, the highest request for a rate increase was less than 10 percent, and in Massachusetts it was 15 percent, compared to 25 percent in Connecticut.

The largest increase requested in New York was 35 percent.

Tong argued that families and small businesses still suffering from the effects of COVID and the rising costs of gas, food and rent, and that they cannot afford to absorb increases in health insurance premiums — increases that he estimated to about $100 more per month for an individual, or $1,200 more per year.

“Economically, a lot of Connecticut families are in really tough shape,” Tong said. “It’s clear that CT residents, individuals in the individual market, small groups, small businesses cannot afford increases of up to 24 percent on average.”

Jessica Cordas, the Republican nominee for attorney general, agreed with Tong that the companies should not raise their rates, but criticized him for waiting so long to address the issue.

“I don’t think there should be a rate hike. I think right now, people in Connecticut are constantly struggling with inflation and the ever-increasing prices of everything,” she said. “I think that’s the job of [Attorney General] to be proactive in what they see happening. And as a lawyer, sometimes you see the writing on the wall … we have to take a more active role and anticipate what’s going on.”

A bipartisan group of lawmakers also called on the department to reject the increases, arguing that inflation has already put too much strain on Connecticut families.

Republican gubernatorial candidate Bob Stefanowski condemned the rate hikes for similar reasons.

“Connecticut residents are already struggling with the highest utility costs in the continental US, record high inflation and a new food tax added by Governor Lamont. A 20 percent increase in the cost of health insurance will be the last straw for many residents,” Stefanowski said in a statement.

Olga Arma, lead research analyst at the Office of Health Strategy, said that currently about 23 percent of Connecticut families have incomes that are insufficient to afford health coverage — an affordable premium is calculated as between 7 and 10 percent of family income. She also said that household incomes in Connecticut are expected to increase by only 4 percent this year.

Karen Moran, president of ConnectiCare, said the state Department of Insurance has rejected requests to increase premiums in previous years and that the company needs to raise rates significantly to establish a baseline that is sustainable.

“We have not asked for anything more than is absolutely necessary to continue to be part of the exchange,” Moran said.

Moran said the company lost more than $65 million in the individual insurance market last year.

Moran added that the company knew doctors, drug companies and hospitals were willing to charge more for services in 2023. She also said they expected more variants of COVID-19 to develop without any additional government money to compensate expenses.

The company provides coverage to approximately 118,000 individuals and small groups in Connecticut.

Neil Kelsey, ConnectiCare’s chief actuary, said the company is seeing more people coming in with more severe diagnoses, especially people diagnosed with cancer. He said this is a result of COVID delaying people’s ability to get medical care.

Moran added that the company is trying to encourage people to see primary care doctors and that she believes the lack of primary care doctors in the state contributes to people having illnesses diagnosed at later, more severe stages.

Kelsey said the cost of mental health coverage is also expected to increase.

“I think it speaks a lot to COVID and what we’ve all been through as a society,” Kelsey said.

Wendy Sherry, vice president of US commercial markets for Cigna, said that even with the proposed increase, they still have some of the lowest rates in the market.

“Even though we have among the higher proposed rate increases, we continue to have among the lowest actual out-of-pocket costs when all is said and done,” Sherry said.

Asked why the company can’t use some of the profits it makes to lower premiums, Sherry described the 3 percent profit margin the company makes as “modest” and said the company reinvests the funds and uses them “to stimulating innovation.”

Tong said Cigna paid $4.25 billion in dividends last year.

He also called for a formal hearing under the UAPA, which would allow for examinations and cross-examination of the insurance representatives. Insurance Commissioner Andrew Mays denied the request, saying he felt Monday’s public hearing was easier for members of the public to attend.

Cordas also criticized Tong’s Monday request for the UAPA, calling it “kicking the can down the road” while waiting to see what happens at the federal level. She said he could have requested that 45 days ago when he originally requested a public hearing.

The Department of Insurance will hold a forum on October 3 to discuss the driving forces behind rising health care costs. The ministry will decide what the final rate increases for 2023 will be in September.

Editor’s note: Information from Jessica Cordas, the Republican candidate for state attorney general, was added to the original version of this story.

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