Health Insurance Rate Filing - Anthem Health Plans (Individual)
Rate request – Annual increase of 14.6 percent
Decision – Disapproved as submitted, reduced to 12.6 percent
On August 31, 2012, Anthem Health Plans filed a request to increase annual rates by an average of 14.6 percent on its individual health plans that provide major medical and prescription drug coverage. In its filing, the company said it sought the request because “claims costs are increasing and are expected to continue increasing throughout the rate effective period.” The company calculated that “trend” the impact of higher medical costs and increase use of medical services would account for 11.4 percent of its requested increase. Mandates from the health care reform law were expected to have just a 1.1 percent impact on premium and the company also expected a 1.7 percent impact on various administrative costs. The company said a 12-month claims trend through 12/31/11 is 11.9 percent and continued to increase during the first five months of 2012 to a high of 18.3 percent rise in May of 2012.
The Department received more than 600 public comments on this filing, which are summarized in the complete filing document. After an actuarial review, the Department determined that Anthem’s calculations to account for higher cost medical services and increased demand for services was appropriate based on the company’s experience. However, the Department could not actuarially substantiate Anthem’s projections of a 1.7 percent increase administrative costs, finding that portion of the request to be excessive. As a result, On October 16, 2012, the Department disapproved Anthem’s request as submitted and lowered it to 12.6 percent.
The new rates will begin January 1, 2013 and will affect approximately 30,000 policyholders in Connecticut.
Content Last Modified on 10/16/2012 2:06:31 PM