Connecticut’s insurance providers are hiking up their prices next year, just not as much as they had originally planned. The state’s Insurance Commissioner Andrew N. Mais announced today that he had approved their request for rate increases but had cut the requested increases.
The companies had originally requested an average total increase of 12.4% for 2024 individual insurance rates. The commissioner approved an average increase of 9.4%. The small group market increase will be 7.4% instead of the requested 14.8%. These rate increases do not affect large group plans people receive from their employers. Those are regulated at the federal level.
Last year, the state’s insurance providers – Cigna, Anthem, and ConnectiCare – requested a 20.4% increase but received an average increase of 12.9% for individuals and 7.9% for small groups.
When making this year’s request, the insurance companies said the increases were a response to increasing medical costs, as well as ongoing recovery from the COVID-19 pandemic, medical service consolidation, and public policy regarding Medicaid.
“Medical costs have surged by 7-9%, and prescription expenses have risen by approximately 11-19%,” said the state insurance department in a press release. “These increases are primarily driven by higher healthcare utilization and greater disease severity, which lead to advanced-stage treatments and an overall increase in healthcare spending.”
The smaller increases affect approximately 188,000 people in the state and represent a savings of $96.2 million vs the requested increases, according to the insurance department.
“Our focus is squarely on the consumers. Our dedicated team of actuaries and other professionals has appropriately reduced the requested health insurance rates increases,” Commissioner Mais said in a statement. “However, the ongoing challenge is in addressing the underlying issues that cause these premiums to rise.”
Not everyone is happy about this agreement, particularly members of Connecticut’s Republican Party.
“The Lamont administration’s approval of these significant rate hikes comes on the heels of last year’s outrageous double-digit rate hikes,” said Senate Republican Leader Kevin Kelly (R-Stratford) and Senator Tony Hwang (R-Fairfield), ranking member of the Insurance Committee, in a joint statement. “It’s tone deaf to thousands of Connecticut ratepayers whose family budgets have been crushed by inflation.”
The Republicans instead argued for their own rate reduction plan, which was introduced in February of this year. According to Republicans, the plan would potentially reduce premiums by as much as 30%. Parts of this plan include eliminating taxes on health insurance, assuming that those savings would be passed on to consumers, as well as allowing small businesses to band together to increase purchasing power for group plans, and greater transparency in billing, among many other actions.
The new rates will go into effect at the start of next year.