Rate Filing: 13.4 percent decrease for plans on and off exchange
Decision: Review completed July 29, 2014
On June 2, 2014, HealthyCT, Inc., a licensed Consumer Operated and Oriented Plan, established under the federal health care reform law, has requested a 13.4 percent rate decrease for small group indemnity plans it is marketing both in and out of Access Health CT, the state-sponsored health insurance marketplace.
The plans are used by employers with one to 50 workers.
Since HealthyCT is a relatively new carrier with no credible claims cost experience, its consulting firm Milliman developed the rates by using models and data sources, such as 2014 premium rate market research and publicly available 2014 rate filings, to price out the average cost per service.
While conducting its actuarial review, the Department was unable to verify with certainty one of HealthyCT’s key reasons for reducing its rate. The company reported that it was removing from its 2014 filing an adjustment made in its 2013 filing for morbidity. A morbidity adjustment speaks to the relative health of one population versus another population. HealthyCT claimed that the morbidity impact on pricing that it used in 2013 was no longer needed in 2014.
The Department actuary sought to verify exactly where in the 2013 filing the company applied the morbidity adjustment but found the company’s responses to those questions “contradictory and troublesome.”
However, the Insurance Department does not have statutory authority to approve or deny rates for small group indemnity businesses. This type of filing is subject to review as part of requirements of the federal health care reform law.
It was noted for the record that the Department believes the company had insufficient actuarial justification to make the downward adjustment for morbidity.
The Department completed its review on July 29, 2014.