My Day At the Insurance Department

Yesterday was a hearing on Anthem Blue Cross's request for a 19.9% premium rate increase. In Connecticut, rate hearings are not required, but there was a hearing last year on Anthem's rates, which resulted in the rate increase being not quite as large as was requested. This was the first post-reform rate hearing. Since the Insurance Department has accepted $1 million in federal funding to revamp their rate review process, I sort of looked at this as the first real rate hearing in Connecticut.

The public testimony was devastating. One man afraid of losing his business because of the cost of health insurance. One woman who's not going to be able to afford to keep her insurance if these rates are approved. I testified about the fact that Anthem in Connecticut says it needs these rate hikes because of increased health care utilization, whereas its parent corporation Wellpoint says they're making record profits because of declines in utilization. I also said that the process needs to be more searching and transparent so consumers can have meaningful participation.

Anthem made the novel argument that, under health reform, if it turns out that the rates are too high because people really didn't use all the health care they anticipated, Anthem would then have a low "medical loss ratio" -- percentage of premium dollar used to pay for health care -- and would have to give rebates to members. Essentially, they said several times that there's no harm if their premiums are too high because it will all work out in the end due to the the law. Of course, that's no help to people who have to give up their insurance because of the rate hikes.

The Office of the Healthcare Advocate and the Attorney General's Office sought to intervene, and were allowed to cross-examine Anthem and call their own witnesses, which they did. They got Anthem to acknowledge that they're not paying doctors any more now than they were a year or two ago, so the increased health care costs aren't because of increased reimbursement rates. They had an actuary differ with Anthem's approach of instituting an across-the-board rate hike across all types of individual plans (HMO, PPO, high deductible).

The hearing officer did not take a single note all day (there was a court reporter, but still). And there was a show of disgust by a group of consumers who stood holding signs like "shame" while Anthem testified. In the end, I did not feel like any of it made much of a difference. I suppose we'll see what the result is. Anthem has until November 29 to submit some additional information the Department requested. So we'll have to see what happens.

All in all, though, this didn't seem like $1 million worth of process, transparency, and public participation to me.

Anyway, here's the Hartford Courant story. But here's the Connecticut Mirror story and the CTNews Junkie story, in which I am quoted.

Interesting day. I learned a lot about how not to do rate review. Jennifer