ConnectiCare is suing Connecticut's Insurance Department because it declined to consider its third revision to its rate request under the Affordable Care Act.

ConnectiCare, which covers about 47,600 people through individual and family plans sold on the Obamacare exchange, got the rate it asked for on Aug. 1 — an increase of 17.4 percent. But three weeks later, company officials said that request had been too low, and it said it needed an average 27.1 percent increase to cover the claims and make a profit on the plans.

ConnectiCare has until Friday to decide whether it will sell on the Obamacare exchange next year. It has asked a Superior Court judge to grant a temporary injunction so that it won't have to honor that deadline while it waits to learn if it will win its argument. A hearing is being held Thursday morning.

Wednesday, the Insurance Department argued that the case should be dismissed, because ConnectiCare has not exhausted its administrative appeals within the department, as required by Connecticut law. The department also noted that if companies were allowed to submit revisions to their requests whenever they wanted, the department would not be able to have prices in place for open enrollment season, which begins Nov. 1.

The lawsuit — and ConnectiCare's final revision — argued that the company should expect its customers next year to be sicker than those it serves now, because UnitedHealthcare is exiting the exchange, as is HealthyCT, the state's nonprofit insurer.

However, UnitedHealthcare has just 1,000 Obamacare customers, and HealthyCT failed because it could not afford the payments it owed to other insurers precisely because its customer base was healthier than theirs. Those payments are designed to keep one company from cherry-picking customers who will file fewer claims.

During the public hearings in early August, ConnectiCare defended its request for a 17.4 percent increase while Anthem defended its request for an average 27 percent increase.

James Auger, regional vice president of sales for Anthem, said the company would have needed an even bigger increase in 2017 if it weren't for the fact that HealthyCT members will end up with Anthem and ConnectiCare, and they are generally healthier than Anthem's current clients.

This week, ConnectiCare threatened to withdraw from the exchange because it will be allowed to raise its premiums by only 17.4 percent.

CEO Michael Wise said Tuesday, "Exiting the Access Health CT Exchange is not a decision that ConnectiCare takes lightly. ConnectiCare has expended significant effort and cost to continue to partner with Access Health CT to maintain the viability of the Exchange. ConnectiCare wants to remain a carrier on the Exchange. But ConnectiCare cannot continue in that effort without seriously considering the losses that it would incur in the future under the inadequate rates approved by the Commissioner. As a result, ConnectiCare must be and is prepared to exit the Exchange if the Commissioner does not grant ConnectiCare an adequate rate on the basis of all the evidence in the record and not only some of the evidence submitted."

Access Health CT, which is Connecticut's Obamacare exchange, responded to the threat Wednesday.

CEO Jim Wadleigh issued a statement that said: "While we don't comment on lawsuits, I will say that if ConnectiCare does decide to leave the exchange we'll adapt to that new landscape."

Wadleigh said that competition benefits consumers, but if there's only one seller on the exchange, that company would have all the people who qualify for subsidies, both healthy and sick. He said that having all the customers in one risk pool "could help Anthem control and help stabilize the cost of the various policies it offers to customers throughout the state.

"The Affordable Care Act represents one of the biggest social policy changes of our lifetime. The implementation of this policy requires everyone, including us to adapt — especially early on — to the changing landscape, and to make sure that we meet the challenges the law presents to us in a way that provides the most consumer-friendly experience possible. That's how we view this development: it's a challenge. And we will meet it."