The State Health Insurance Partnership Plan had a difficult 2022, thanks to ongoing claims from the COVID-19 pandemic.
The latest annual report from the Connecticut Comptroller’s Office outlines how Fiscal Year 2022 went against previous actuarial projections, resulting in the first year the program took in less in premiums than it paid out in claims since the Partnership Plan began to adjust premiums by geographic region in 2019.
During 2022, program participants paid $622 million for coverage through the program, but made $659 million in healthcare claims.
According to the report, the increased costs were on par with those suffered by health programs across the country and were not unique to the state program. “There were unanticipated cost increases resulting from pent-up demand and an unforeseen additional spike in COVID hospitalizations due to the Omicron variant,” said the report.
The actuarial group in charge of projections for the program is reportedly optimistic that FY 2023’s costs will be more in line with pre-pandemic numbers. Estimations included in the report predict that it will take in about $13 million more in premiums during the period from July of 2022 to the end of June 2023.
According to the report, the long-term financial stability of the Partnership Program is at higher risk than the base state plan, which could mean further cost overages in the future. The Partnership Plan has higher per-member costs and was impacted by some low medical loss groups leaving the program this past year.
The Comptroller’s Office has already implemented a lower-cost plan option which will, ideally, make it accessible to more municipal groups and add more customers to offset increased costs.
Should the program continue to experience unforeseen financial struggles, the report also includes possible policy fixes. These include creating additional premium tiers to make it easier to retain low-cost groups and allowing the Comptroller’s Office to set independent reserve fund adjustments for both the Partnership and State plans.
As outlined in the report: “If the reserve fund has more funds than necessary to cover claims runout (claims incurred but not yet paid) and reasonable claims fluctuations, then the reserve fund adjustment will result in a reduction in the premium. Alternatively, if the reserve fund is too low, then the adjustment will result in an increase in the premium.”
The Partnership Plan has been in effect since 2016 and allows municipal employees, like teachers, firefighters, police, and others to receive health insurance coverage through the program for state employees. According to the Comptroller’s Office, the program currently serves nearly 60,000 municipal employees.
Among the additional benefits available through the program is the state’s Health Enhancement Program, which provides lower-cost services to participants who agree to regular preventive screenings.
According to the report, this has led to an increase in cancer screenings between 13-26% above national benchmarks for breast, cervical, colorectal, and prostate cancer. Those numbers were up across all racial and ethnic groups.
These preventive screenings will, hopefully, mean lower claim costs in the future through “surgery avoidance, preventive care, chronic disease management and lowering emergency room use.”