The Connecticut Insurance Department is been particularly active at posting health insurance rate filings on the Web, and its filing database gives glimpses of how the Patient Protection and Affordable Care Act of 2010 (PPACA) is starting to affect real-world health coverage prices.
PPACA itself now requires insurers to explain any requests for increases over 10%, and the U.S. Department of Health and Human Services (HHS) posts national rate increase information here.
For Arkansas, for example, HHS has posted rate review information for 8 products from one company.
For Vermont, HHS has posted rate review information for 5 products from one company.
But HHS posts only summary information.
The Connecticut department posts entire rate filings, including the state tracking number and the number used to track the filing through the System for Electronic Rate and Form Filing (SERFF), a system that states have developed to automate the rate and form filing process.
Oxford Health Plans (CT Inc., a unit of UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH), recently filed an application seeking an 8.7% increase in 2013 for small group plans that cover a total of about 21,700 people.
Oxford has included analyses of the effects of PPACA.
PPACA calls for the federal government to start imposing a fee on fully insured coverage in 2013. The fee would fund the tax credits on the health insurance to be sold through the new PPACA health insurance exchanges, or Web-based health insurance supermarkets, starting in 2014.
The total fee would increase to $14.3 billion industrywide in 2018, from $8 billion in 2014.
In 2014, UnitedHealthcare might have to increase premiums by 2.3% to cover the cost of the fee, according to David Hoesly, the actuarial pricing director at Oxford’s parent, UnitedHealthcare.
From 2014 through 2016, PPACA also could require health insurers to pay new risk adjustment fees, to create a pool that would buffer insurers against any increases in claims that occur as PPACA underwriting and pricing restrictions take effect.
UnitedHealthcare estimates it will have to increase 2014 premiums by 1.8%, or $5.85 per member per month, to cover the baseline reinsurance amount, Hoesly says.
The current filing does not include any adjustments for the effects of the insured coverage fee or for the reinsurance fee, Hoesly says.
The current filing does include one effect of PPACA in the current rate filing.
The company says in one section of the filing, Schedule G, that it expects the addition of the PPACA women’s preventive health services benefits mandate — which requires non-grandfathered health plans to cover basic preventive services and products such as Pap smears and contraceptive prescriptions without imposing deductibles, co-payments or other cost-sharing requirements on the patients — to add 0.2 percentage points to the total small group medical cost increase trend in 2013.
Another company, ConnectiCare Inc., Farmington, Conn., has asked for a 13.5% rate increase for small group health plans that cover a total of about 52,000 people. The increase would take effect in the fourth quarter.
The company says in an actuarial memorandum that it is estimating the PPACA women’s health mandate will add about $2.50 in costs per member per month for its plans, with $1 per member per month going toward medical costs and $1.50 per member per month going toward pharmacy costs. The mandate will increase the plan’s costs by an amount equal to about 0.3% of the plan’s proposed average rate of $960.36
Aetna Health Plan Inc., a unit of Aetna Inc., Hartford (NYSE:AET), applied to increase rates 5.06% on small group plans that cover a total of about 3,300 people starting Aug. 1. The department approved an amended rate increase after asking Aetna Health Plans to discuss the effects of PPACA.
Aetna said it expects the PPACA women’s health mandate to have an impact on small group plans ranging from 1.4% of premiums to 2.6% of premiums, with a weighted average of 2%.
About 65% to 90% of the cost of the mandate could be pharmacy costs, because the mandate will require plans to cover 100% of the cost of oral contraceptives, Aetna told the Connecticut department.
The department ended up allowing Aetna to assume that the cost of the women’s health mandate will average 0.73% of small-group premiums.
Connecticut General Life Insurance Company, an arm of Cigna Corp., Bloomfield, Conn. (NYSE:CI), applied to increase rates for plans that cover 836 people 5.4% in 2013.
Jennifer Bonafilia, a compliance senior associate at Cigna, notes that the company had to hold rates steady for half a year because “internal capacity constraints brought about by the challenges of implementing [PPACA]” interfered with the company’s ability to generate rate filings.