Rate request: 19.37 percent increase
Decision: Approved December 16, 2013
On October 29, 2013, ConnectiCare, Inc. filed a request to increase rates 19.37 percent on certain SOLO individual HMO insurance policies sold before March 23, 2010 and are considered grandfathered under the federal health care reform law. There are approximately 440 individuals who have these particular plans.
The new rates account for ongoing increases in the cost of medical services and demand for those services, also known as “trend.” ConnectiCare, Inc. is estimating the impact of “trend” at 10.68 percent for medical and 11.30 percent for pharmacy.
The Department received three public comments during the review period, all opposing rate increase.
After an actuarial review, the Department determined that this particular block of business has been experiencing extremely high cost claims, with a medical loss ratio in excess of 115 percent. It means the company was spending $1.15 to pay medical claims costs for every $1 of premium it took in, well in excess of the 80 percent medical loss ratio required by the federal health care reform laws. As a result, the Department deemed the increase necessary and approved it on December 16, 2013.
The new rates will take effect on policies renewing on or after Jan. 1, 2014.