Insurance regulators in Connecticut and Washington state have rejected health insurance rate increase requests filed by carriers doing business in their states.
Barbara Spear, the acting insurance commissioner in Connecticut, found the current premium rates set for grandfathered individual direct pay plans by a unit of WellPoint Inc., Indianapolis (NYSE:WLP), to be “actuarially sound” and “not excessive,” but she found a request for a 19.9% increase for the products, including BlueCare HMO, Lumenos and Tonik, to be “excessive.” She disapproved the application for the increase.
The disapproval will affect rates for about 48,000 enrollees, Spear estimates in her ruling.
The WellPoint unit, Anthem, testified that health care costs were going up, that enrollees were using more services and that, because of economic downturn “some younger, healthier members have dropped coverage.”
But Anthem noted that the trend for its high-profile Tonik plan for “young invincibles” is negative 0.2%.
Spear says she rejected the application partly because Anthem provided aggregated data, did not file discreet rate requests for each product, and used a medical cost increase trend rate that seemed to be too high.
Connecticut regulators believe the actual medical trend supports holding the individual rates steady, not increasing them, Spear says.
In Washington state, Washington Insurance Commissioner Mike Kreidler rejected an increase request of 3.7% for one plan operated by Regence, Seattle, and a 4.9% increase request for another plan.
Regence already had received approval for rate increases in October. In the new application, it was asking for permission to replace the plans and increase rates again at the same time, Kreidler says in a statement about his decision to reject the increase filings.