Your insurance rates can increase without you or the state having a say.
According to Connecticut law, insurance companies seeking to increase insurance premiums can raise their rates without a public hearing or government approval unless the state insurance department takes action.
State Representative Susan Johnson (D-Windham) recently announced that she is co-sponsoring legislation to make an insurance company’s request to raise insurance rates a public matter.
The proposed law, “An Act Concerning Rate Approvals for Individual Health Insurance Policies,” requires that insurance companies have public hearings before they increase their rates. It also mandates that insurance companies provide documentation to the public that shows why the rate increases are necessary, limits reasons for rate increases and requires that insurance companies prove that a rate increase is “reasonable.”
In addition, the law allows the state attorney general and health care advocate to intervene in insurance rate cases and appeal decisions to the superior court.
Rexford Santerre, a UConn professor of finance and health care management, agreed that consumers should have advocates that look after their insurance rates. “Given that price competition is sorely lacking in the individual health insurance marketplace, someone has to advocate on behalf of individual consumers who are otherwise powerless in comparison to the dominant health insurers. Santerre said in an e-mail that “the Offices of the Healthcare Advocate and Attorney General could play a key role in that regard.”
But, “on economic grounds,” Santerre said that he would prefer that the state government seek alternate avenues to increase competition in the insurance industry. He proposed that the state offer a public option, stimulate interest in insurance purchasing cooperatives, encourage consumers to purchase guaranteed renewal policies to prevent their rates from changing or allow individuals to purchase insurance out-of-state to increase the size of the market.
Anthem proposed a 32 percent increase on individual policies last summer. After a public hearing, Anthem was approved a rate increase of 16 to 20 percent, according to a press release.
Johnson hopes that her legislation continues to cause positive change and possibly lower insurance rates.
The bill will “[let] the sun shine, so to speak, on what’s going on with the rate increases,” said Johnson.
According to The Hartford Courant, insurance companies requested a 21.4 percentincrease in the cost of premiums, on average, for individual plans in 2009 for 2010. The state insurance department, on average, approved rate increases of 20.4 percent that year.
When asked how the act might affect UConn students, Johnson said “whenever you can save money you’re going to help college students – tuition is high.”
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