Active purchasing bill passes Senate

This afternoon the Connecticut State Senate passed SB-596, a bill directing Access Health CT, the Connecticut Health Insurance Exchange, to negotiate with insurers to keep premiums affordable for consumers and small businesses. Other states and most large employers negotiate with insurers to control costs. The bill passed 23 to 12 on a party line vote. Republicans offered five amendments to dilute or delay negotiation which were defeated. Advocates for consumers and small businesses supported the bill in testimony; insurers were opposed. The bill now travels to the House for a vote.

Insurance exchange rate proposals in for HealthyCT

Insurance premiums for HealthyCT, the new nonprofit health insurer co-op, have been posted on the insurance dept.’s website. HealthyCT is the only insurer that has submitted rate proposals for 2014 so far, despite an April 30th due date. Average monthly premiums for individuals will be $427/month and for small groups $445/month. While the benefit plans will change next year and previous prices are not strictly comparable, in 2010 individual premiums in CT averaged $306 per month. 2014 rates will vary by customer based on age, residence, and the plan selected; rates must still be approved by the insurance department. Policymakers have options to control premium increases but they must act soon to be effective.

Still waiting for insurance exchange rates, UnitedHealthcare is out

Rate proposals by insurers planning to participate in CT’s health insurance exchange were due to the Insurance Dept. last Tuesday, but none have been filed according to the Hartford Courant. However HealthyCT says they filed with the department on Friday. The exchange is blaming federal regulations and delays. UnitedHealthcare notified the exchange last week that they will not be participating in the exchange, leaving Anthem, Aetna, HealthyCT, and ConnectiCare. Insurer rates have been eagerly anticipated by advocates and others hoping for affordable premiums. Concerns about rate shock have been heightened by 25% increases in rates submitted to Maryland’s exchange. Several options are available to the exchange and state policymakers to keep premiums affordable, but some require legislative action. The legislative session ends in four weeks.

“RATE SHOCK” Fact or Fiction

Since the passage of the Affordable Care Act one of the principle concerns has been: what will health insurance cost. The potential fallout from high price health insurance has been termed “RATE SHOCK”.

Stakeholders and advocates have voiced concerns over “Rate Shock” from very early on. The CEO of the CT Health Insurance Exchange, Connecticut’s Health Care Advocate and the Deputy Insurance Commissioner have all voiced concerns publically over what impact “Rate Shock” will have once the Exchange is open for business. It has been a discussion at Exchange Board Meetings.

So if “Rate Shock” is a real concern voiced by so many deeply involved in the success of health care reform, then why would the Universal Health Care Foundation of CT characterize “Rate Shock” as a “myth” and “scare tactic” in a recent blog post? Their position defies words and logic.

Their opinion that a “large majority” of the uninsured and underinsured will be eligible for Medicaid or subsidize is correct BUT there is a huge portion of our population that is going to need to buy health insurance with little or no subsidy -- in short they will be buying it retail.

If this portion of our population sees the health insurance options available as too expensive, they could simply opt out of buying coverage at all and just pay the penalty. This would not be good for the overall success of the Exchange and health care reform in general. In short, “Rate Shock” With Maryland’s Exchange just announcing their plans will reflect a 25% price increase, there is no reason to believe Connecticut will be any different.

Should we be “scared”? No.. Should we be informed, educated and involved? Yes.. Should legislation be passed directing the Exchange to use “Active Purchasing” Yes.. Should legislation be passed to adjust the “Medical Loss Ratio”? Yes. Should legislation be passed directing the Exchange to use “secret shoppers to insure we have true “network Adequacy”? Yes.. Should we work to make the best health insurance buying environment possible? Yes. Should we mischaracterize the reality of “Rate Shock” as a “myth” and “scare tactics”? No

Kevin Galvin Small Business For A Healthy Connecticut

Health Insurance Rate Shock: What Connecticut Can Do

All indications are that Connecticut health insurance costs will rise significantly next year. Fortunately there are several tools available to policymakers to mitigate that trend for Connecticut consumers and small businesses who will be mandated to secure coverage as of January 1st. A new brief outlines state affordability options including a stronger state MLR limit, active purchasing, reinsurance, capping rate increases, limiting insurer losses, and state supplemental subsidies. It is also critical to address the underlying causes of rising health costs that drive insurance prices including misaligned payment incentives, overtreatment, poorly coordinated care, waste, excessive administrative costs, and consumer disengagement. Affordable insurance coverage is critical for successful health reform. State policymakers should use every available tool.

Rate Shock Officially on the Exchange Board’s Radar

We appreciate OPM Secretary Ben Barnes for bringing up the subject of health insurance affordability and “Rate Shock” at this week’s CT Health Insurance Exchange Board meeting by floating the idea that legislation be passed allowing a lowering of the Medical Loss Ratio. As in other states, lowering the Medical Loss Ratio will most assuredly bring health insurance costs down. The unanimous vote of the Exchange Board finally acknowledges that the high cost of health insurance products coming onto the Exchange is a factor in the overall success in attracting Connecticut residents to the Exchange to purchase health insurance.

Now let’s hope that competitive bidding known in the industry as active purchasing also be made part of the Health Insurance Exchange’s practices. Active purchasing has a proven record of controlling health insurance costs.

Kevin Galvin, Small Business for a Healthy CT

Exchange Board Balance

In late fall of 2012 two Exchange Board seats became vacant due to resignations and a third was dropped completely with the resignation of the Special Advisor to the Governor on Health Reform. That seat no longer exists. After more than three months, one seat has been filled by Mr. Paul Philpott currently a Realtor in Connecticut and retired for the Connecticut Insurance Industry. Although I commend Mr. Philpott for his willingness to take this challenging voluntary position, Mr. Philpot is yet another person from the insurance industry on what was supposed to be a Board populated by "consumers". As of Thursday's Exchange Board meeting the "Small Business" seat has yet to be filled. This appointment has been the responsibility of State Representative Larry Cafero. It is unfortunate Representative Cafero has chosen not to make this appointment during such a critical time for our Exchange. But our legislature has given the Exchange some attention. The Insurance and Restate Committee recently voted unanimously to add a broker seat to our Exchange, a clear violation of the letter and spirit of the Affordable Care Act. Unfortunately small businesses, the largest employer in the state and nation, do not presently have a seat at Connecticut’s Health Care Exchange table.

Kevin Galvin Small Business For A Healthy Connecticut