Rate request: 6.1 percent increase for 4th Quarter of 2013
Decision: Disapproved as submitted, reduced increase to 2.1 percent.
On August 15, 2013, ConnectiCare, Inc. filed a request to increase its base rates 6.1 percent on approximately 592 policies in its large group HMO market. These policies, which cover approximately 46,000 workers and dependents, provide health care coverage for businesses with 51 workers or more.
The company said it is requesting the new rate to account for increases in medical costs and the demand for medical services, also known as “trend.” The company project that “trend” will 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.
After an actuarial review, the Department determined that the company’s calculations for “trend” for both medical and pharmacy services were excessive. As a result, the Department disapproved the original request and instead approved a reduced increase of 2.1 percent.
The new rates will take effect October 1, 2013.