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Have You Checked Your New Health Insurance Rates?

Posted by Larry Doyle on September 23, 2010 7:25 AM |

Our economy is experiencing disinflation and trending towards deflation, right? Well, it looks like the health insurance industry did not get that memo. If rates do go up, they can’t be more than a few percent, right? Wrong!!

Although this issue is not getting the attention it deserves, once again those footing the bills in our nation are getting bent over. In my home state, a recent story highlighted Health Insurers Seeking Rate Hikes of More Than 20 Per Cent in Connecticut:

Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons.

Both issues — the new federal health care reform and rising medical costs — are significant drivers of the increases, according to filings by insurers with state regulators that were reviewed by The Courant.

It remains to be seen how much of the requests will be approved. Many people might not see an increase before Jan. 1, and these proposed changes would largely affect new business, mostly in the individual market.

But the overall price shift is the clearest indicator yet of what customers and employers can expect when health insurers submit proposed 2011 rates in late October and November. The current round of price requests launches a clash between insurers who say the increases are justified and consumer advocates and government officials who say the numbers are wildly inflated.

Aetna asked earlier this summer for an average 24.7 percent increase over last year for small-group HMO plans. State regulators approved an average increase of 18 percent for all of Aetna’s small-group plans and 14.2 percent for large-group and middle-market plans, according to Aetna and an initial review of documents provided to The Courant by the state Insurance Department.

A complete tally of average price requests is not available, as the Insurance Department must decide on hundreds of health plans and variations of plans for the five major companies offering medical coverage in Connecticut. But an examination of the documents  suggests that the requests might be even larger than those of recent years at a time when health insurance has become a political hot potato leading into the midterm elections.

In what might appear to be an oddity, companies are citing a huge range of effects that the health care reform mandates will have on plan prices — from near zero to well over 20 percent. The reason is that among all the plans, some already deliver the provisions required by health reform, while others do not.

I did not think I was due for a proctology exam for a while, but it feels like it is right around the corner.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Always Learning
  • Disgruntled BD

    Yes we can….raise your insurance premium! The insurance lobby had broad participation in reform legislation, so shouldn’t they be entitled to the spoils by raising rates? Sarcasm aside, when observing the overwhelming favoritism toward big, private business interests in his centerpiece legislation (health & financial reform), I don’t see where pundits derive the notion that Obama is a socialist. I don’t think he is far enough to the left to be classified as a democrat (I am a democrat, with regrets). President ‘O’ (if we can say George ‘W’…) did not create any “single payer” or other form of “universal” coverage (not that I wanted that, either). Private insurers are drooling over the prospect of new business resulting from the coverage mandate [which may not survive anyway]. Health reform is a disaster beyond what most people can presently imagine. It was crafted with no concern, or perhaps understanding, of how contract provisions and regulations affect premium and claims experience.






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