Connecticut insurance companies say the rising cost of medical services, including testing for COVID-19, is driving their rate increases for next year. But it’s not that simple.
There is a lot more that goes into these rate increases.
Two health insurance companies, Anthem Health Plans and Connecticare, that currently cover more than 97,000 Connecticut residents are proposing average rate increases of 9.9% and 5.5% for 2021.
“We get that medical cost is expensive, which drives premiums to be expensive and so we’ve really tried hard this year especially to keep those rate actions to a minimum,” ConnectiCare CEO Eric Galvin said.
Connecticare assumes the impact of COVID-19 will be about 1.6% of the premium. Anthem assumes it will be about 2.3% of the premium.
Both carriers are attributing the increases to rising health care costs, including the cost of prescription drugs and increased demand for medical services.
“The biggest single cost is prescription drug costs. Those costs have continued to accelerate, year over year over year, at a rate disproportionate to other types of services,” Galvin said.
Lynne Ide of the Universal Healthcare Foundation said those increases will have a serious impact on consumers
“I think the big story right now is in this time during COVID, the economic insecurity people are feeling and actually the economic hardship that many people are experiencing. I think going into the next year we’re really worried about any increase,” Ide said.
There hasn’t been a penalty for people who choose not to buy insurance since 2018.
Ide said they have already seen a number of people drop out of the insurance market because they can’t afford coverage. The number of uninsured in Connecticut since the start of the pandemic has gone from 5% to about 10%
“If you have to choose between keeping a roof over your head or feeding your kid you might make the choice to not opt for coverage and take your chances,” Ide said.
The state Insurance Department will hold a public hearing on the rate increases September 2. Insurance regulators will then make a final determination on the rates later that month.