Location:
INSURANCE - HEALTH;

OLR Research Report


December 14, 2009

 

2009-R-0442

MEDICAL INSURANCE RATE INCREASES REQUESTED AND APPROVED IN CONNECTICUT

By: Janet L. Kaminski Leduc, Senior Legislative Attorney

You asked us to identify the five largest health insurance companies or health maintenance organizations (HMOs) in Connecticut. For each one, you asked us to provide you, for the past 10 years, or longest period available up to 10 years, (1) the amount of each rate increase each company requested for its group and individual medical products offered in Connecticut and (2) the amount the Connecticut Insurance Department approved.

SUMMARY

According to the Connecticut Insurance Department, the five largest medical insurance companies or HMOs in Connecticut based on direct premiums earned and enrollment are (1) Anthem Health Plans, Inc.; (2) Health Net of Connecticut, Inc.; (3) ConnectiCare, Inc.; (4) United Healthcare Insurance Company; and (5) Aetna Life Insurance Company.

State law requires insurance companies and HMOs to file rates with the department for individual contracts (i.e., sold directly to individuals). But it requires only HMOs to file rates for group contracts (e.g., sold through employers) (CGS 38a-481 and 38a-183). Since the department does not have statutory authority to review insurance company rates for group medical policies, it is not able to provide rate information for such policies.

Additionally, the department is not required to maintain records for 10 years. Rather, it retains HMO records for five years and insurance company records for two years. Thus, these are the time periods for which we are able to provide rate information.

Debra Korta, writing on behalf of the department, noted that:

the Department reviews the rate increase requests in terms of (1) actuarial science, together with (2) applicable statutes which provide that the rates not be excessive, inadequate, or unfairly discriminatory. It is a complicated, thorough process. The Department would be happy to provide more details or make a presentation on the process, if the legislature would find it helpful.

FIVE LARGEST MEDICAL INSURANCE COMPANIES OR HMOS

Table 1: Five Largest Medical Insurers or HMOs in Connecticut

Insurance Company or HMO

Direct Premiums Earned[1]

Total Enrollment[2]

Percent of Business that is Fully Insured[3]

Anthem Health Plans, Inc.

$ 2,753,647

1,560,101

38%

Health Net of CT, Inc.

1,128,691

193,433

58%

ConnectiCare, Inc.

810,170

178,909

93%

United Healthcare Ins. Co.

408,028

240,387

46%

Aetna Life Ins. Co.

253,650

271,822

26%

[1] Source: Connecticut Insurance Department's Financial Analysis and Compliance Unit, based on the National Association of Insurance Commissioners' Accident and Health Market Share Report. Direct premiums earned are for contracts issued in Connecticut in 2008.

[2] Source: Connecticut Insurance Department, from Consumer Report Card on Health Insurance Carriers in Connecticut, October 2009. Total enrollment numbers reflect both fully-insured and self-insured business.

[3] Fully-insured business represents the population that is under the Connecticut Insurance Department's jurisdiction. Self-insured business generally is under the federal government's jurisdiction.

RATE INCREASES REQUESTED AND APPROVED

The information in the following tables is from the Connecticut Insurance Department. Where information is available, the amounts shown represent the average rate increase requested and approved across all medical plans in each company's individual and group portfolios, as applicable. Where information is not available, we indicate as such and the reason.

Anthem Health Plans Inc.

Table 2: Rate Increases Requested by and Approved for Anthem Health Plans, Inc.

Year

Individual Plans

Group Plans

Requested

Approved

Requested

Approved

2010

23.55%

16.50%

15.78%

12.88%

2009

10.80%

8.80%

12.10%

12.10%

2008

10.68%

10.68%

10.90%

10.90%

2007

7.55%

7.55%

7.82%

7.82%

2006

10.14%

10.14%

9.50%

9.50%

Health Net of Connecticut, Inc.

Table 3: Rate Increases Requested by and Approved for Health Net of Connecticut, Inc.[1]

Year

Group Plans

Requested

Approved

2010

19.09%

19.09%

2009

13.11%

13.11%

2008

11.92%

11.92%

2007

10.61%

10.61%

2006

10.90%

10.90%

[1] Health Net does not write individual business.

ConnectiCare, Inc.

Table 4: Rate Increases Requested by and Approved for ConnectiCare, Inc.

Year

Individual Plans

Group Plans

Requested

Approved

Requested

Approved

2010

16.20%

11.80%

14.50%

14.50%

2009

17.30%

17.30%

10.20%

10.20%

2008

15.60%

15.60%

11.50%

11.50%

2007

7.90%

7.90%

9.50%

9.50%

2006[1]

n/a

n/a

12.50%

12.50%

[1] ConnectiCare did not issue individual plans in 2006.

United Healthcare Insurance Company

United Healthcare does not write individual health insurance in Connecticut. While it does write group health insurance here, the insurance department does not have statutory rate review authority over this business.

Aetna Life Insurance Company

Table 5: Rate Increases Requested by and Approved for Aetna Life Insurance Company[1]

Year

Individual Plans

Requested

Approved

2010[2]

n/a

n/a

2009

12.00%

12.00%

2008

16.50%

16.50%

[1] The insurance department does not have statutory rate review authority over Aetna's group health insurance business.

[2] Aetna's rates are effective July 1 of each year. The company has not yet submitted a July 2010 rate filing.

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