CT Approves New Health Insurance Exchange Rates: 5 Things To Know

CONNECTICUT — The state Insurance Department sharply reduced rate hike requests from insurance carriers on the state health insurance exchange, but the new rates are still a significant hike for families.

Here are five things to know about the rate changes and high cost of healthcare:

What are the new rates?

Insurance carriers proposed an average increase of 20.4 percent for individual plans, which was reduced by the Insurance Department to 12.9 percent. Carriers asked for an average 14.8 percent increase for small group plans, but that was reduced to 7.9 percent.

Individual plans on the exchange cover about 111,000 people, while group plans cover about 23,800 lives. Insurance Department reductions will save ratepayers about $138 million in premiums.

The Inflation Reduction Act extended subsidies for Affordable Care Act marketplace plans through 2025. The subsidies were first approved through the American Rescue Plan Act and were set to expire at the end of the year. Subsidies help cover costs for many middle class policyholders.

“As a result of that bill, no one on the exchange individual market will pay more than 8.5 percent of their income for premiums,” Department of Social Services Commissioner Deidre Gifford said. “And many will pay significantly less.”

What about a public option for health insurance?

Gov. Ned Lamont said a public option would be a band-aid compared with dealing with the underlying costs of healthcare.

Public option proposals have surfaced during previous legislative sessions, but they haven’t made it to a full vote.

“I did not want the taxpayers taking all the financial risk if all of a sudden we found that health care costs went through the roof and insurance programs weren't actuarially sound,” Lamont said.

How much more will it cost people on the plans?

Costs will vary depending on several factors.

The Insurance Department estimates that a 45-year-old single person in Fairfield County on a Connecticare plan making about $40,800 a year would pay $203 in monthly premiums in 2023, compared with $193 in 2022.

The same person making $67,950 would pay $481 in 2023, up from $456 in 2022.

The actual approved rate increase is the example is 15 percent, but subsidies from the Inflation Reduction Act will effectively make the premium increase 5 percent.

What is driving up the costs?

Insurance companies cited growing health care and prescription drug costs as major factors in their rate requests. Medical costs have increased about 8 to 10 percent, while prescription costs are up 10 to 12 percent.

Potential future claims related to COVID-19 were also a factor.

What else has Lamont proposed to get healthcare costs under control?

Lamont’s administration is in early talks with about half a dozen nearby states to form a drug purchasing consortium. The move would give all states involved more leverage during prescription drug cost negotiations.

Hospitals are another large driver of healthcare costs. Lamont announced a program in August that would provide tuition assistance to low-income and minority students who enter accelerated and cost-effective nursing and social work programs. The $35 million initiative also includes funding to recruit and retain faculty for nursing and behavioral health education programs.