Rate request: 26.6 percent increase
Decision: Approved December 16, 2013
On October 29, 2013, ConnectiCare Insurance Company, Inc. filed a request to increase rates approximately 26.6 percent on certain individual Point of Service (POS) insurance policies sold before March 23, 2010 and are considered grandfathered under the federal health care reform law. There are approximately 1,500 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 Insurance Company, Inc. is estimating the impact of “trend” at 10.48 percent for medical and 11.30 percent for pharmacy benefits.
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 96.3 percent. It means the company was spending 96 cents to pay medical claims cost 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.