Connecticut Regulators OK Rate Hikes Lower Than Anthem Sought

 

Saturday, Aug 08,2009, 9:47:13 AM   Click:

Caught between an angry public and insurer citing soaring medical expenses, Insurance Department of the state has not made both sides happy Thursday when he rejected a request for rate hike Anthem Blue Cross and Blue Shield health policy.

In a sternly worded order, followed by the department with his promise to refuse the anthem of the request to increase premiums as high as 32 percent. The department instead recommended an increase of 13 per cent and 20 per cent and said that the rate will be effective on January 1 and not on 1 October that the company had requested.

About 56,000 policies are affected state.

"Anthem was tone deaf to the realities facing their policyholders," said Insurance Commissioner Thomas R. Sullivan, in a prepared statement. "Companies should think twice before submitting something to the Department, especially of this scope and magnitude, without appropriate justification."

The case has become a touchstone in Connecticut for opposition to rising health insurance costs amid state and national debates over health care reform. And it promises to remain controversial, as officials, who had fought on behalf of Anthem customers, expressed outrage Thursday over the ruling.

Among those customers is Jennifer Bass of Scotland, who is facing the loss of her job and has to care for her father who recently had a stroke. Her premiums were set to rise by 22 percent under Anthem's proposed rate schedule, and she said Thursday she's frustrated, though she doesn't yet know her new increase.

"It is helpful but it is still an increase," Bass said. "I view this as the beginning of more rate hikes."

Anthem spokesman Sarah Yeager said in a statement that while the company disagrees with the decision, it respects the department's professionalism throughout the process.

"It is important to note that we understand and share strongly the concerns of our members over the rising cost and rate of utilization of health care services and the corresponding adverse impact on insurance premiums," Yeager said. "The increasing demand for medical services, including the use of new, expensive prescription drugs, and demand for advanced technologies are driving up the cost of health care at an unprecedented rate."

Attorney General Richard Blumenthal and Kevin Lembo, the state health care advocate, who had jointly opposed the Anthem request, issued sharp rebukes to the department late Thursday.

"In a crippling assault on Anthem consumers, this decision effectively makes health insurance unaffordable for thousands of our citizens," Blumenthal said. Including the increases of last January, he added, "The effective increases in the past year for most policies will be 30 percent or more. I am hoping the insurance commissioner may still be open to reason and argument."

"Less bad is still bad," Lembo said. "'We'll meet you halfway,' may be a negotiating strategy, but it's not a regulatory strategy."

The insurance department's report, prepared by hearing officer Mary Ellen Breault, rebuffed arguments by Blumenthal and Lembo that affordability should be a key consideration in the rate decision. Instead, Breault's report said, the department need only decide that increases "cannot be excessive" under statutory guidelines.

Breault's report said the date of the increases was moved to Jan. 1 because consumers testified they were told by agents their rates would be good throughout 2009. Though he called that move a victory, Blumenthal said the disregard for affordability on the part of the insurance department was "unacceptable, unconscionable and a betrayal of trust and the public interest."

Lembo said he will draft a series of bills that would give his office more power in intervening in insurance-rate increases and give the public a greater say in the decisions. Blumenthal said his office is examining all avenues for future action.