Rate request: 19 percent increase
Decision: Approved January 7, 2015
On December 4, 2014, Golden Rule Insurance Co. submitted a rate filing for a proposed 19 percent increase on individual major medical plans that are grandfathered under the federal Affordable Care Act (ACA).
Grandfathered status means the plans were marketed before March 23, 2010, the date the ACA was enacted, and do not have to comply with the ACA mandates if there have been no major changes to coverage or benefits since then.
There are approximately 2,300 these grandfathered Golden Rule policies currently in effect in Connecticut. These policies are a closed block of business and are no longer being marketed.
In its filing, Golden Rule identified several factors leading to the increase request. They include rising medical costs and an increase demand for medical services. “The number of office visits and others services continue to grow,” the company stated in its filing. “Patients who are sicker generally have a higher intensity of health care utilization.”
Golden Rule also accounted for fees and taxes associated with the ACA and a shift of the cost difference to private health plans noting that “Medicare and Medicaid rates to hospitals are expected to decline.”
The Department received no public comments on this filing.
After an actuarial review, the Department noted that because these policies are no longer being marketed, claims costs for grandfathered plans will continue to be spread out over a dwindling and aging risk pool, using increasing more medical services.
The Department found that the company’s calculation on a 20 percent impact of “trend,” a pricing factor that accounts for medical inflation and an increase in demand for medical services, was appropriate. As a result, the Department also noted that Golden Rule would easily meet or even exceed the ACA-mandated 80 percent minimum loss ratio (percentage of premium dollars used to pay medical services). As a result, the Department approved the increase on January 7, 2015.
The new rates will take effect March 1, 2015.