Insurance mandates may be felt in new rates

Hartford - Connecticut ranks high on the list of states with large numbers of health care mandates on the books, such as required medical insurance coverage for infertility treatment or autism spectrum disorder services.

The cost of mandating such coverage is expected to be felt in the rates individuals and certain employers will pay once the state's new health care exchange - essentially an online marketplace for insurance - is up and running. Open enrollment begins Oct. 1, and coverage is set to begin Jan. 1.

But just how much the expense of mandates will ultimately affect people's premiums is up for debate.

"Affordability is key to expanding access to health insurance in Connecticut, but health benefit mandates increase the cost of health insurance, making it even less affordable and accessible," the Connecticut Business and Industry Association contends. "Each new mandate passed by the legislature directly results in an increased premium rate to pay for the new service or procedure required by the state."

Kevin Counihan, CEO of Connecticut's exchange, Access Health CT, acknowledges that the state has a lot of mandates. Although the definition of what is considered a mandate can differ, a 2012 report from the Blue Cross Blue Shield Association determined Connecticut has 27 state-mandated benefits plus an additional five for less-common conditions. The only state with more was Maryland, with 28 state-mandated benefits and eight more for rarer conditions.

"Does that contribute to the cost of coverage, of price? Absolutely," he said. But Counihan contends the "big driver" is more the cost of providing health care in Connecticut, throughout the Northeast and in other select parts of the country. Connecticut, he said, already has the fourth-highest medical costs in the nation for a number of reasons, including demographics and higher reimbursements paid to hospitals and physicians by commercial insurers.

Under the Affordable Care Act, the federal government allowed states to choose to keep most or all of the existing state mandates already on the books when they were putting together the list of essential benefits that plans offered by the exchange must include, said Richard Cauchi, program director for health issues at the National Conference of State Legislatures. All Connecticut mandates will be included in the plans offered by the state's exchange. Premiums will ultimately vary based on the percentage of cost covered by enrollees - creating a tiered system - as well as the amount they're eligible to receive in federal subsidies to offset the cost.

"Once a state has a mandate on their books ... many consumers or enrollees in insurance come to depend on that or come to assume that's in the plan," Cauchi said.

A 2010 study by the University of Connecticut's Center for Public Health and Health Policy evaluated 45 health insurance benefit mandates in Connecticut, as defined in the state legislation creating the review. The report found that the health insurance benefit mandates in effect on Jan. 1, 2009, accounted for roughly 22 percent of total premium for group coverage and 18 percent of total premium for individual coverage, though there's been some dispute about the figures.

Five mandates - tumors and leukemia, mental health, psychotropic drugs, diabetes diagnosis and treatment, and newborn coverage - accounted for 12 percent of premium for group coverage. The next five highest mandates with an impact on premiums included colorectal cancer screening, off-label use of cancer drugs, infertility, mammography and chiropractors and accounted for 5 percent of total premium for group coverage.

The Department of Insurance is reviewing eight plans submitted for the Access Health CT exchange - four individual plans filed by Aetna Life Insurance Inc., Anthem Health Plans Inc., ConnectiCare Benefits Inc. and the HealthyCT Inc. provider co-op - and four filed for small group plans for one to 50 employees from Anthem, ConnectiCare, HealthyCT and United Healthcare Insurance Co. Those companies represent about 80 percent of the current market in Connecticut. The agency has until July 31 to approve, revise or reject the rate proposals.

In addition to the state mandates, those plans must include a list of essential benefits required by the federal government. Since Connecticut already required all but pediatric dental and pediatric vision coverage, the federal requirements are not expected to have as much of an impact on Connecticut premium costs compared to other states.

"We have these very rich packages. That really is the only option. There really isn't a lot of affordable options out there," said Jennifer Herz, an assistant counsel at CBIA.

According to initial filings to the department, the average monthly rates for individual plans ranged from $296 to $397, while the average monthly rates for small group plans ranged from $440.30 to $716. At least one of the insurers is revising its filing, likely to a lower amount.

Paul Lombardo, an insurance actuary with the Department of Insurance who is reviewing the plans and the assumptions they're based on, said it's difficult to say whether there will be sticker shock in Connecticut once the rates are finalized.

"We've been saying, for any individual or employer out there, it's really going to depend on what you had prior to this," he said. "I really don't think people are going to know how it affects them until they look at quotes they get for insurance when the exchange is up in October."

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