Rate request: 10.2 percent increase
Decision: Disapproved on September 15, 2014, approved a 9% increase
On June 30, 2014, Oxford Health Plans (CT), Inc., submitted a rate increase request of 10.2 percent for health plans used by employers with 50 or fewer workers. These are plans that are offered on the open market and not through the state-sponsored exchange.
This block of business has approximately 4,400 policies covering 13,000 workers and their dependents. The plans are compliant with the federal Affordable Care Act (ACA), offering the required Essential Health Care Benefits.
The company cited rising medical costs and increased demand for services. In developing the rate, Oxford applied a medical inflation or “trend” factor of 10.2 percent, meaning that it anticipates that the cost of medical services and the demand for them will increase by about 10.2 percent over the next year.
After an actuarial review, the Department determined that the company overstated the impact of trend, ruling that a 10.2 percent projection is “excessive,” and that a trend impact of 9 percent is more appropriate. As a result, the Department disapproved the original rate increase request and, instead, approved a 9 percent increase.
The new rates will take effect January 1, 2015.