Attorney General Richard Blumenthal today proposed sweeping reforms to the way state regulators approve individual health insurance policy rates in Connecticut.
The proposal includes requiring public hearings for all insurer-proposed rate increase requests, something not currently required under state law.
Blumenthal said the reforms seek to stem recent individual health insurance rate increases “that have been crippling small business owners and consumers,” including a 13 to 20 percent increase for Anthem individual policyholders.
“Massive health insurance rate hikes should be given strict scrutiny, not secrecy,” Blumenthal said. “Stopping rate increases requires reform — giving consumer advocates and the public a strong voice and open view.”
Blumenthal unveiled his proposal this afternoon at the Legislative Office Building in Hartford and was joined in support by Healthcare Advocate Kevin P. Lembo, and legislative leaders including House Speaker Christopher Donovan, D-Meriden, and Insurance and Real Estate Committee Co-chairmen state Sen. Joe Crisco, D-Woodbridge, and state Rep. Steve Fontana, D-North Haven.
Blumenthal’s proposal would also:
— Â Â Â Â Â Compel insurers to notify all policyholders of rate hike applications and dates of public hearings;
— Â Â Â Â Â Â Require the Insurance Department to approve, deny or modify every application. Under current law, rate increases may go into effect without department action;
— Â Â Â Mandate rates be “reasonable.” Current law only says they may not be “excessive”;
— Â Â Â Â Â Presume all information submitted at a rate proceeding is public with the burden of proof on the insurer to show why it should not be disclosed.
— Â Â Â Â Â Â Empower the Attorney General’s Office and the Healthcare Advocate to intervene as parties in all rate cases.
— Â Â Â Â Â Â Authorize the Attorney General’s Office, the Healthcare Advocate and consumers to appeal rate decisions to Superior Court.
The rising costs of medical care and insurance premiums have been at the heart of the health care reform debate in Connecticut and across the country.
Public outcry about rate increases reached a boiling point in Connecticut last summer when it became public that Anthem Blue Cross was seeking to raise rates by as much as 32 percent on some individual health plans.
Sen. Christopher Dodd, Lembo, and Blumenthal, among others, complained that the increase was excessive and they urged state Insurance Commissioner Thomas Sullivan to reject it.
Sullivan agreed that the request was too high and his department subsequently approved a lower rate increase.
Then in January, The Hartford Business Journal reported that three of the five largest health insurance companies in Connecticut received regulatory approval to raise their average 2010 rates on individual and group health plans by 12 percent or more.
The largest rate hike – 19 percent – was granted to Health Net of Connecticut for its policies sold to employers. Health Net recently completed a merger with United Healthcare.
Farmington-based ConnectiCare received approval to raise its average rates on policies sold to individuals by 11.8 percent, and its group plans by 14.5 percent, the report said.
Insurance industry representatives say rising medical costs, the aging population, and defensive medicine being practiced by doctors are the biggest drivers in the rate hikes.
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