Press Releases - September 13, 2017
For 2018 Health Insurance Rate Requests
Insurance Commissioner Katharine L. Wade today announced that the Connecticut Insurance Department (CID) has released its actuarially justified rate determinations on health insurance companies’ rate requests for the 2018 coverage year.
Of the 14 filings made by 10 health insurers for plans that cover about 270,000 people:
- Six of the requests were disapproved and reduced
- Five filings were approved as submitted
- One filing was disapproved and increased
- The initial individual rate requests for the two companies whose rates were subject to June public hearings – Anthem and ConnectiCare Benefits Inc., (CBI) were disapproved and then recalculated, reducing Anthem over 9 percent and CBI by nearly 1 percent.
- Those recalculations were based on the lack of federal funding for the Cost Sharing Reduction (CSR) payments, which were applied to the “Silver” on-exchange plans only and subsequently approved.
- The federal funding of the CSR payments for coverage year 2018 would have reduced the approved rate increases from 27.7% to 16.8% for CBI and from 31.7% to 24.7% for Anthem.
“The Department has made its rate determinations for 2018 to provide certainty for Connecticut consumers, the insurance market and Access Health CT to be ready for the individual market open enrollment period which begins November 1, 2017,” Commissioner Wade said. “The increase in rates for the Silver exchange plans will be mitigated for consumers, eligible for federal tax credits, because they will be offset by the increase to tax credits for 2018.
“This has been a challenging year for all involved due to the uncertainty about federal funding for the Cost Sharing Reductions (CSR) payments and individual market stability challenges. CSR payments are important financial relief for consumer out-of-pocket costs,” Commissioner Wade said. “We continue to work with the Malloy administration, our congressional delegation and fellow insurance regulators on solutions that will provide certainty on CSR funding and stabilize the market for our citizens.”
The Department has identified the following factors as the key cost drivers for the 2018 rates:
Cost Sharing Reduction (CSR) Payments: As a result of the lack of clarity about future funding of CSRs and the need to make rate determinations for 2018, the Department asked exchange carriers to make a supplemental filing which assumed CSRs would not be paid. The supplemental rate increase for non-payment of the CSRs is 16.7 percent, this is applied only to the Silver exchange plans. The increase in rates for the Silver exchange plans will be mitigated for consumers receiving tax credits by the increase in the federal tax credits for 2018.
Annual trend (medical inflation): This relates to the cost of medical services, demand for and severity of services and increased prescription drug costs. This year, it has risen to an average rate increase of 10.5 percent.
Elimination of the moratorium on the health insurance tax (HIT): The elimination of the moratorium on the HIT increases premiums on average 3%.
Federal Risk Adjustment Formula: Under the ACA, health insurers annually pay or receive funding depending on the assessed riskiness or health of their insured populations. There has been volatility in this program and concerns from state insurance regulators over the formula for who qualifies for payments or who is required to pay. The Department has raised those concerns with the federal Center for Medicare and Medicaid Services and offered solutions to help achieve a workable, equitable formula and foster a more robust marketplace, on and off of the exchange.
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