As insurers seek CT rate hikes, Congress set to up health care benefits

On Friday, Congress was poised to pass Democrats’ flagship inflation-busting bill that will partially lower health care costs for enrollees through the Affordable Care Act and Medicare . But as Connecticut lawmakers praised the federal relief, they are also raising concerns about proposed rate hikes that could affect the plans of thousands of people in the state.

Connecticut Democrats celebrate the ‘Inflation Reduction Act’ after more than a year of negotiating a bill that has taken many different forms and also includes an overhaul of tax policy and provisions on change climatic But while Americans could see some tangible benefits in the near future, much of the health-related programs will have a much slower roll-in.

The most immediate benefit is the extension of the Affordable Care Act’s enhanced subsidies for three years. That boost was created under Democrats’ 2021 federal pandemic relief plan, the American Rescue Plan, and was expected to expire at the end of 2022. The continued financial assistance is expected to save households of Connecticut about $220 a month in premiums, according to Social Services Commissioner Deidre Gifford.

The rest of the health components will take several years to implement. The bill will affect thousands of Connecticut residents who are enrolled through the state exchange – Access Health CT – as well as seniors in Medicare.

The bill also allows Medicare to negotiate prescription drug prices for the first time in history. It will initially apply to 10 drugs starting in 2026, and then the number will increase each year until 2029. The bill also would cap out-of-pocket costs for prescription drugs at $2,000 a year starting in 2026. Currently, about 19,000 people in Connecticut spends more. more than $2,000 a year out of pocket.

Drug companies have argued that this will stifle innovation and the creation of new drugs, but Gifford cited a Congressional Budget Office report that says it will not have “a significant impact” on new drugs over the next three decades

Although these measures will take much longer, drug companies will have to pay a rebate to Medicare starting next year if costs rise more than the rate of inflation year over year. According to Gifford, there are 700,000 people in Connecticut who receive health care through Medicare.

The legislation was intended to more broadly cap out-of-pocket costs for insulin at $35 a month, but enough Senate Republicans voted to block it from applying to those with private insurance. Now, the copayment cap applies only to Medicare beneficiaries who need the diabetes drug, which will begin in 2025 and cover about 35,000 people in the state, according to Gifford.

Connecticut has its own law that caps out-of-pocket prices for insulin at $25 a month. It applies to some residents who have private insurance, such as those enrolled in the state exchange, but not to those with federally regulated plans.

But as Congress expands some health-related benefits, state officials are concerned about potential rate hikes sought by insurers, which represent an average increase of 20.4% for individual health plans next year .

The Connecticut Department of Insurance will review the proposed 2023 rates at a meeting Monday. The agency says the plans in question cover about 206,000 residents in the state. Members of the public will be able to watch or attend the high-profile meeting in Hartford, and officials will be able to ask questions of insurers. The Insurance Department is expected to make a decision in September whether to accept them, approve a smaller hike or reject them entirely.

“This should be a time for the people of Connecticut to get an explanation as to why premiums have to be so high,” Ted Doolittle, Connecticut’s health advocate, said in an interview.

“There’s a lot of pressure on the Department of Insurance to make sure rates are as low as they can be,” Doolittle added. “The burden of proof is on the insurers to show why the price they are asking is lower and unavoidable.”

At a news conference Thursday touting the health care benefits of the Inflation Reduction Act, Lamont said the Insurance Department will take a “very hard and strict look” at the sol. carrier requests. He noted that federal legislation could reduce pressure on hospitals, which in turn pass costs on to insurers.

“I like to think of this Inflation Reduction Act as, for example, reducing the number of people without insurance. That’s a lower cost that hospitals will have to bear now,” Lamont said. “That can reduce claims from insurance companies.”

“We’ve got a long way to go with inflation, but I think the Inflation Reduction Act is going to make a big difference, and it’s a big difference not just this year, but at least for years to come,” he added.

As part of the rationale for the rate hikes, some of the insurers, including ConnectiCare, pointed to the expected drop in ACA subsidies that were set to disappear in 2023. ConnectiCare, which sells only individual plans on the state exchange, it is looking for an average increase of 25.2% for plans that currently cover 8,782 people.

Kimberly Kann, a spokeswoman for ConnectiCare, said in a July statement that there were legislative and regulatory factors that were beyond the company’s control, such as the early expiration of the ACA’s expanded subsidies at the end of the year .

“Our proposed rates are based on several factors, including medical and pharmacy cost trends, along with the continued impacts of COVID-19 on our members’ utilization of services, including delayed access to care,” he said. Kann said at the time.

“Additionally, the legislative and regulatory environments continue to present market challenges beyond the company’s control, including the loss of enhanced advanced premium tax credits provided through the American Rescue Plan Act that will expire in 2022 and state-mandated benefits,” he said. added

But Blumenthal and other critics picked apart that argument at a news conference Friday morning since Congress finally passed legislation extending those subsidies for a few more years. They also pointed to record profits for insurance companies as a reason why the Department of Insurance rejected the proposed increases.

“The request for this big rate increase crumbles like a house of cards under the slightest scrutiny,” Blumenthal said. “If you look at the basics, the insurance companies are presuming that there will be no extension of the current subsidies when Congress literally today gives final approval to that extension through 2025… And yet the companies insurance companies are betting on the failure of Congress.”

While Lamont and other state officials focused specifically on health care provisions, the Inflation Reduction Act is also one of the most expansive climate bills in recent history, providing tax incentives for producing clean energy and buying electric vehicles.

The bill passed the closely divided Senate on Sunday, sending the House back to Washington after its month-long recess. The lower house was expected to pass the legislation on a party-line vote.

While the main goal of the bill is to reduce inflation, it left out many Democratic priorities in order to reach a deal with key negotiators. A major concession was the implementation of early education and family-related programs, such as child care subsidies, a national paid leave program, universal kindergarten, and the continuation of monthly credit payments fiscal for enhanced children.

Republicans have vehemently opposed the legislation, citing some reports from economists that say it will have little or no effect on reducing inflation.

“Biden-Blumenthal inflation is hurting Connecticut, and this latest mammoth spending package is another example of Democrats putting extreme progressive policies above the well-being of the American people,” said newly minted GOP Senate candidate Leora Levy in a statement.

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