HARTFORD, Conn. — Connecticut Atty. Gen. William Tong is arguing that rate increases sought by Anthem Blue Cross and Blue Shield, ConnectiCare and United/Oxford are not supported by evidence and therefore should be rejected.
In a release on Thursday, the Attorney General’s Office said that Tong argued his point in a letter delivered to Connecticut Insurance Commissioner Andrew Mais.
The release says that the proposed average individual rate request for the plan year beginning on Jan. 1, 2025, is an 8.3% increase and that the proposed average small group rate request is an 11.9% increase.
For those rates to be approved, Connecticut law requires the state’s Insurance Department to determine that the rates requested are not “excessive, inadequate or unfairly discriminatory,” the release says.
Tong believes the rate increases proposed by the three insurers he named exceed “various inflationary and economic growth measurers.”
“It is hard to comprehend why managed care companies fail to bring premiums and their underlying costs drivers in line with other products and services that consumers purchase,” Tong said 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.”
In the letter, Tong says that insurers are “uniquely positioned” to drive down costs when bargaining with healthcare providers. He notes that medical costs continue to be allowed to increase in ways that greatly exceed inflationary measures.
“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,” Tong writes in the letter.
He notes that the overall cost of care continues to “skyrocket.”
In the case of the individual and small group markets that he is evaluating, Tong said individual consumers and small employers take on the burden of the consistently rising costs.
“It is long overdue for insurers to explain why they have been unable to rein in medical costs through their negotiations with medical providers, most importantly institutions which provide inpatient and outpatient hospital care,” Tong says in the letter.
In the letter, Tong later asks detailed questions regarding the rate hike requests, as he identifies multiple areas where the insurers rely on unsupported assumptions. He questions if each insurer uses Connecticut’s Cost Growth Benchmark during its contract negotiations with its providers.
The letter also points out issues of double-counting, drug costs and provider-based offices through which hospitals demand separate fees for typical office-based services. The release says that some insurers treat these as outpatient services, forcing patients to pay high deductibles that would not normally apply to regular office services.
To wrap up the letter, Tong says, “It is abundantly clear that insurers are perversely dis-incentivized from driving down unit costs through negotiation of lower rates. The burden of proof falls on the insurers to justify their rates—to provide transparent, factually-supported actuarial analysis. The lack of information about PBM arrangements makes these applications facially deficient.”
Tong continues to say that the carriers make sweeping statements about their annual trend but don’t offer data to justify their assumptions.
“I encourage the Insurance Department to thoroughly scrutinize these applications and reduce any and all components of the requested increases that are not actuarily justified,” Tong’s letter concludes.
Kim Kann, vice president of Public Relations for ConnectiCare, released the following statement:
"ConnectiCare has requested a rate increase for our individual health insurance plans for 2025. We remain extremely mindful mindful of the impact that rate increases have on our members. Our proposed rates are determined by medical and pharmacy cost trends and our members' need for care. We work closely with hospitals, doctors, and other medical providers to help control costs and improve health outcomes for our members. We are committed to supporting the state’s health insurance marketplace and providing Connecticut residents with high-quality health plans, as we have for over 40 years."
In a statement from Anthem and Blue Cross and Blue Shield Monday, a spokesperson said, "At Anthem Blue Cross and Blue Shield in Connecticut, we’re committed to ensuring consumers have a choice of health plans that offer access to high quality, affordable care. Our initial rate filing reflects current healthcare cost and utilization trends in Connecticut, and we look forward to working with the state as we continue the regulatory process.”
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Dalton Zbierski is a digital content producer and writer at FOX61 News. He can be reached at dzbierski@FOX61.com.
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