Rate request - 13.1 percent increase for 4th Quarter of 2013
Decision - Disapproved as submitted, reduced to 11.2 percent
On March 31, 2013, ConnectiCare, Inc. filed a request to increase its base rates 13.1 percent on approximately 50 policies in its small group HMO market. These policies, which cover approximately 2,500 workers and dependents, provide health care coverage for businesses with 50 workers or fewer.
The company said it sought the new rate to account for increases in medical costs and the demand for medical services, also known as “trend.” The company projected that “trend” would have an impact of about 11 percent on premiums. ConnectiCare noted that inpatient services have been shifting to higher cost beds – such as those in intensive care, critical care or neonatal care units. Outpatient services have been shifting toward higher cost services related to chemotherapy and injectibles.
The company also cited the impact of new taxes and fees mandated by federal health care reform that take effect January 1, 2014 and the policies in question will be in force at that time. The company said the requested adjustment will allow the company to pro-rate for the federal costs.
During the 20-day public comment, the Department received six comments in opposition to the rate request. The comments are summarized in the final disposition included in the filing documents.
After an actuarial review, the Department determined the company overestimated the projected medical services and pharmacy costs. As a result, on June 11, 2013, the Department rejected the requested increase as submitted, and instead, approved a reduced average increase of no more than 11.2 percent.
The new rates take effect October 1, 2013.