A bipartisan coalition of elected leaders, state officials, industry groups, and advocacy organizations have called on the state’s insurance commissioner to reject the latest request for rate increases from the state’s health insurers.
Insurers submitted requests for rate increases across the range of insurance plans available in the state. While the average rate increase request is between 5%-14%, some rate increases may go as high as 18.8%.
“I’ve been coming to these meetings for the past 10 years and every single year it is a rate increase,” said Sen. Tony Hwang, R-Fairfield and ranking member of the Insurance and Real Estate committee, at a public hearing to discuss the rate increase request last week.”You could have surprised all of us and knocked us on the floor by saying. ‘Hey, this year we’re asking for a rate reduction,’ but it’s never happened. You know, the landscape might have changed and the cost factors might have changed, but one thing has remained constant. You continue to ask for rate increases and that is where the frustration and the venting you will hear from many of my colleagues and many of your rate payers that feel as though you are tone deaf. That you are not listening to them about outlandish executive compensation and all the largess of corporate benefits that are on the backs of rate payers in this state.”
Brandon Rousseau, sales director for Anthem Blue Cross and Blue Shield, argued that it was an increasing number of state mandates and laws that may be well meaning, but are a major driver of increasing year over year costs for insurance.
“Today, vital tools used by health plans at the request of insurance purchasers are under attack. Members of the Connecticut legislature seek to pass legislation that, while laudable in many instances, do make insurance more expensive and less competitive.”
Rousseau singled out Senate Bill 6, which allows consumers to get only one prior authorization for prescription drugs, as an example of a state mandate which increases costs.
“This past legislative session, the actuarial firm Pascal Advisors was retained by Anthem to conduct an independent analysis concerning the health care cost implications of Connecticut Senate Bill 6,” he said. “The analysis found limiting health plan’s ability to use prior authorization would result in cost increases for Connecticut residents, a $12 to $17 million annual increase in health care costs for Anthem fully insured members, and a $14 to $20 million annual increase in health care costs for the Connecticut State Employees Plan.”
Attorney General William Tong, D-CT, wrote a letter to the insurance commissioner where he rejected the reasoning of the insurance companies.
“It is hard to comprehend why managed care companies fail to bring premiums and their underlying cost drivers in line with other products and services that consumers purchase,” Attorney General Tong states in the letter. “Instead, we are informed each year of unit costs that far outstrip inflation as a forgone conclusion, without any explanation for why the costs cannot be curtailed through negotiation.”
Tong said that the insurance companies are “perversely incentivized” to continue increasing rates.
“Historically, insurers have cost-shifted these increases to consumers through direct rate increases and by offering higher deductible plans, instead of challenging the runaway unit cost problem directly through hard negotiations with providers. Thus, the overall cost of care continues to skyrocket,” he added.
The Connecticut Hospital Association also released a statement calling on insurance companies to better control their business practices.
“Addressing rising commercial healthcare costs will require action to eliminate national health insurance company administrative practices that raise costs and ensuring that the state Medicaid program pays rates that actually cover the cost of care.Connecticut hospitals provide high-quality care to anyone who walks through their doors, regardless of ability to pay,” the statement said. “We must continue pursuing policies that will help improve affordability without jeopardizing the world-class healthcare delivery offered to every resident or reducing access to critical healthcare services, especially in underserved communities.”
The Connecticut Citizens Action Group called out corporate greed as the primary driver for increased costs for consumers.
“As people in our state struggle to make ends meet, they cannot continue to absorb costs just so these corporations can spend billions on stock buybacks and tens of millions on their executives’ compensation packages,” said Liz Dupont-Diehl, CCAG’s associate director.
According to data provided by CCAG, in 2023, UnitedHealth spent over $6.6 billion on stock buybacks and its CEO, Andrew Witty, earned $23.5 million for his annual salary. That same year, Elevance spent nearly $2.7 billion on stock buybacks and compensated its CEO, Gail Boudreaux, with $22 million.
