1.6 percent weighted average rate increase
On May 7, the Connecticut Insurance Department released the 2016 rate filings that carriers in the state have submitted for the coming year. UnitedHealthcare’s rate request for their off-exchange plans was a whopping 33 percent, but it was an outlier, and it was also only for off-exchange coverage. For the four carriers that offer plans on Access Health CT, the weighted average requested rate increase was initially 7.7 percent.
But over the next two months, the requested rate changes in Connecticut were adjusted downwards twice, ending up at 2.9 percent for plans sold through Access Health CT (and 5.2 percent marketwide, including off-exchange plans).
In September, regulators released final rates for Connecticut, and they’ve been reduced even further. The final weighted average 2016 rate hike is just 1.63 percent for plans sold on Access Health CT. (market share is as of March 2015):
- Anthem (39.8 percent of enrollees) = 2.4 percent increase (Anthem originally requested a 6.7 percent increase, but revised it down to a requested 4.7 percent increase in July)
- ConnectiCare (42.3 percent of enrollees) = 1.3 percent decrease (carrier originally requested a 2 percent increase, but revised it down to a requested 0.7 percent increase in July)
- Healthy CT (15.6 percent of enrollees) = 7.2 percent increase (HealthyCT, an ACA-created CO-OP, had originally requested a rate increase of 13.96 percent, but revised their request down to a 3.43 percent increase in July. Ultimately, insurance regulators found that to be insufficient and determined that a 7.2 percent increase would be necessary).
- United Healthcare (2 percent of enrollees) = 5.5 percent increase (United originally requested a 12.4 percent increase but revised it down to a requested 11.4 percent increase in July).
Market-wide, including off-exchange plans, the Connecticut individual market will see a weighted average rate increase of 3.53 percent in 2016. In Connecticut’s small group market, things look even better: a market-wide weighted average rate decrease of 2.9 percent.
In 2014, Connecticut had the 4th highest premiums in the US, but a Kaiser Family Foundation analysis found that Connecticut ranked 9th in the country for average benchmark plan premiums in the exchange in 2015. Given some of the double-digit rate changes that have been proposed in various other states for 2016, it’s likely that Access Health CT’s premiums are going to be much more middle-of-the-road when compared with the rest of the country in 2016.
And in good news on the rate front, ConnectiCare has stated that the average age of their enrollees declined from 2014 to 2015, and they expect that trend to continue in 2016 (enrolling “young invincibles” has been a primary goal for all of the exchanges, as they tend to be relatively healthy). In addition, carriers in the exchange have said that although there was an influx of previously uninsured enrollees in 2014 who had “pent-up” healthcare needs, that’s no longer as much of a concern heading into 2016.
Regulators ultimately approved a rate increase of just 2.4 percent for Anthem, but when Anthem revised their proposed rate change from 6.7 percent down to 4.7 percent in July, they noted that the initial filing was based on claims data through March, while the second filing was based on claims data through May. Clearly, claims started to taper off as the spring wore on, indicating that the intial surge in demand for healthcare from newly-insured members doesn’t necessarily continue long-term.
The ACA had some built-in mechanisms to stabilize premiums, but two of them – reinsurance and risk corridors – were only established as three-year programs. So as of 2017, they will no longer exist, and the general assumption is that rates will increase as a result. The current estimate for Connecticut is that rates will climb by an average of $25 to $30 per month in 2017 as a result of the reinsurance and risk corridors programs winding down. At ACAsignups, Charles Gaba translated that into a one-time 5 to 6 percent rate increase. But again, that’s not part of the calculation for the coming 2016 open enrollment period.
Access Health CT fee increase
In late May, the Access Health CT board of directors approved an increase in the fee levied on health insurance carriers to support the exchange. The fee is currently 1.35 percent of premiums, and will increase to 1.65 percent in 2016. For reference, Healthcare.gov has a 3.5 percent assessment.
Carriers in Connecticut had filed their initial 2016 rate proposals in April, and the revised rates described above were filed in July. Despite the fact that the fee hike had been announced in the interim, the revised rates were mostly lower than what the carriers had initially filed.
But exchange still on solid financial ground
Although many other state-run exchanges are struggling to become financially self-sustaining now that federal funds are drying up, Access Health CT is on solid financial footing. The exchange board approved an $81.6 million budget proposal for the upcoming fiscal year, but more than half of that amount will be reimbursed by the state Department of Social Services, as it’s money that’s spent to enroll people in the Medicaid program.
The new budget reduces spending by nearly 25 percent, and Access Health CT’s CEO Jim Wadleigh noted that Connecticut is “the best positioned state in the country” in terms of having an exchange that’s on track to be financially self-sufficient.
Access Health CT’s CFO Steven Sigal noted that while the exchange wants to have nine months of reserves on hand, it currently has between five and seven months of reserves. Increasing the carrier fee to 1.65 percent of premiums should help bolster the exchange’s reserve cushion.
By March 26, enrollment in private plans through Access Health CT had reached 110,095 people. That includes everyone who selected a plan, although some enrollees never paid their initial premiums, and others opted to cancel their coverage early in the year. As of March 31, HHS reported that 98,269 people had effectuated private plan coverage through the exchange in Connecticut, although that number fell to 92,213 by the end of June (attrition is a normal part of the individual health insurance market, particularly with the new system that conducts the bulk of the year’s enrollment during a single quarter – during the rest of the year, overall effectuated enrollment will naturally decline).
But by mid-September, the Connecticut Mirror was reporting an effectuated enrollment of 96,621 people in Access Health CT, which represented a 4.8 percent increase since June.
Access Health CT has been working to obtain documentation to verify income and immigration from thousands of enrollees whose initial application wasn’t complete with that data. About 7,000 of them did not respond to repeated requests for information, and risked losing their coverage as a result – but the exchange notes that they will work with carriers to get coverage reinstated if the enrollees are able to provide the necessary documentation. Another 16,000 people have submitted the required documentation and are waiting for it to be processed.
A study conducted in Connecticut in June found that 50 percent of the people who were new enrollees in the exchange for 2015 were previously uninsured. 38 percent of the people who enrolled in private plans during the second open enrollment period were new to the exchange for 2015. Of the people who had in-force coverage at the end of June, 78 percent are receiving premium subsidies and 42 percent are receiving cost-sharing subsidies.
Access Health CT – like most other states – offered a special enrollment period (SEP) in the spring for individuals who were previously unaware of the tax penalty for being uninsured. The requirement for insurance went into effect in 2014, but many people only learned about the penalty when they filled out their 2014 tax forms. The penalty-related SEP ran from April 1 through April 30, and Access Health CT announced that 1,429 people enrolled in private plans through the exchange during the SEP.
SEPs are also available to individuals who experience a qualifying life event, such as getting married or losing a job. A SEP is the only way to obtain coverage – on or off the exchange – for the rest of 2015. Without a qualifying event, enrollment won’t be available again until November 1, for coverage effective January 1, 2016.
From November 15, 2014 through February 15, 2015, a total of 277,336 people enrolled in Medicaid or CHIP through Access Health CT. If you qualify for Medicaid (HUSKY), you can enroll anytime throughout the year, although enrollment does tend to peak during the open enrollment period for private plans, due to the outreach activities conducted by the exchange. Native Americans can also enroll in private plans through the exchange year-round.
2015 health plans and premiums
Four health insurers are offering individual and family plans through Access Health CT for 2015. Anthem, Connecticare and HealthyCT are returning from 2014, and UnitedHealthCare joined the exchange for 2015.
Regulators in Connecticut pushed back on the 2015 rates proposed by insurers. Connecticare and Anthem both requested increases of more than 10, which regulators reduced to 3.1 percent or less. HealthyCT received approval to reduce its rates an average of 8.5 percent.
According to the Commonwealth Fund, 2015 rates on Access Health CT decreased 1 percent on average for individual coverage and 2 percent on average for family coverage. Although Connecticut had the 4th highest premiums in the nation in 2014, there are eight states where the average benchmark premiums in the exchange are higher than Connecticut in 2015.
Penalties going up for those not insured
The penalty for not having health insurance is higher in 2015 than it was in 2014, and it will increase again for 2016.
For people who aren’t insured in 2015, the fee is the greater of 1) two percent of annual household income above the tax filing threshold, OR 2) $325 per uninsured adult (half that amount for a child under 18) up to $975 for a family. The fee will be assessed when you file your 2015 taxes in 2016.
For those who remain uninsured in 2016, the fee will be the greater of 1) two and a half percent of annual household income above the tax filing threshold, OR 2) $695 per uninsured adult (half that amount for a child under 18) up to $2,085 for the family. The fee will be assessed when you file your 2016 taxes in 2017.
Learn more about the penalty and who is exempt.
History of Connecticut’s exchange
Connecticut was one of the early adopters in implementing a health insurance marketplace. Gov. Malloy signed legislation in 2011 to create the Connecticut Health Insurance Exchange, which was rebranded as Access Health CT in February 2013. The U.S. Department of Health and Human Services (HHS) approved Connecticut’s blueprint for a state-run exchange in December 2012.
Access Health CT describes itself as an active purchaser, but did not negotiate 2014 rates with health plans. Prompted by concerns over high premiums, Connecticut legislators revisited the issue during the 2014 session. SB-11 would have allowed Access Health CT to negotiate with insurers for plans sold in 2016. However, the bill did not pass. Connecticut’s Fairfield County made the Kaiser Family Foundation list of the top 10 most expensive health insurance markets in 2014.
Access Health CT has been one of the nation’s most successful marketplaces. Signs of that success include:
- Connecticut’s uninsured rate dropped by 50 percent: from 7.9 percent in 2012 to 4 percent in 2014.
- Connecticut launched a consulting business through which other states can license Access Health CT’s technology or pay Access Health CT to manage various marketplace functions. According to an article in the CT Mirror, nine states have expressed interest.
- Access Health CT’s former CEO, Kevin Counihan, was tapped to take over as the CEO of the federal exchange, HealthCare.gov. Jim Wadleigh took over the CEO role. Wadleigh previously served as the exchange’s chief information officer.
In addition to launching its own health insurance exchange, Connecticut also opted to expand Medicaid under the ACA, using federal funds to increase income eligibility for the program to 138 percent of the poverty level. There have been media reports that Connecticut is cutting back on Medicaid coverage for some enrollees, but Medicaid expansion under the ACA is still in place in Connecticut, and will continue to be in place going forward. The cuts are for parents with dependent children, who are currently eligible for Medicaid with household incomes up to 201 percent of the poverty level; the eligibility threshold is being reduced to 155 percent of the poverty level (this year for households without earned income from a job, and next summer for households with earned income from a job).
Connecticut health insurance exchange links
Access Health CT
State Exchange Profile: Connecticut
The Henry J. Kaiser Family Foundation overview of Connecticut’s progress toward creating a state health insurance exchange.
Connecticut Health Reform Central
Information about exchange planning and development