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June 7, 2024

Aetna to leave CT’s small group fully insured market as insurers seek rate hikes for 2025

COSTAR Aetna's Farmington Avenue headquarters in Hartford.

Hartford health insurer Aetna will be the latest insurer to exit Connecticut’s fully insured small group health insurance market, according to state regulators. 

Aetna has informed the state Department of Insurance it has decided to leave the small group market and will no longer offer new businesses small group health plans. The insurer will only renew existing plans through the end of the year, the insurance department said.

Aetna is one of many insurers in recent years to flee the small group market, which many have described as being in collapse amid less competition and escalating costs.

In May, Bloomfield-based Cigna Healthcare and New York-based insurance technology company Oscar notified policyholders in Connecticut that they will stop renewing and enrolling new small groups in a plan they jointly launched a few years ago. 

Harvard Pilgrim Health Care and ConnectiCare have also withdrawn their plans in recent years.

Aetna was a small player in Connecticut, covering only 105 small group lives as of June 2023. Cigna/Oscar is a much larger player, with 17,500 small group customers as of March 2024.

Small group plans are for employers with 50 or fewer workers.

The Insurance Department made the disclosure about Aetna’s departure on Friday, when the agency announced new rate requests for 2025. 

Insurance carriers selling policies on and off Connecticut’s Affordable Care Act exchange have asked the state for an average increase of 8.3% for individual plans and 11.9% for small group plans, according to information released Friday.

Both increases are well below the hikes sought last year, which were 12.4% for individual plans and 14.8% for small group plans.

For individual plans, the increases requested range from 7.4% to 12.5%, while for small group plans, the proposed rate increases range from 5.1% to 13.6%.

Overall, there were eight filings made by seven health insurers for plans that currently cover approximately 200,000 people, including 142,000 people in individual plans and 58,000 in small group plans. That’s down from nine insurers offering plans, but the overall number of individuals covered has increased from about 188,000 last year.

Anthem filed rates for both individual and small group plans that will be marketed through Access Health CT, the state-sponsored health insurance exchange. ConnectiCare Benefits Inc. (CBI) and ConnectiCare Insurance Co. Inc. filed rates just for the individual market.

For small group plans offered off the exchange, in addition to Anthem, Oxford Health Plans (CT) Inc., Oxford Health Ins. Inc. and UnitedHealthcare Insurance Co. filed rates.

For small group plans on the state’s exchange, Anthem seeks a 13.6% average increase, with a range of 7.9% to 18.9%, the largest increase sought by a small group insurer. Anthem insures the largest number of people of any of the small group plans, at 37,667. It seeks the same rates for the plan it will offer off the exchange.

Oxford Health Plans seeks a 5.1% average increase with a range of -1.5% to 13% for its off-exchange small group plan, which covers just 1,083 individuals. 

Oxford Health Insurance Inc. has requested an 8.9% average increase, with a range of 5.8% to 11.4% for its off-exchange small group plan, which insures 17,411 individuals.

UnitedHealthcare seeks a 9% average increase, with a range of 2.9% to 11.5%, for its off-exchange small group plan, which insures 1,534 individuals.

For insurers offering individual plans on the state exchange, Anthem seeks a 9% average increase, with a range of 4.3% to 18%, to cover 63,277 individuals. It seeks to offer the same rates off the exchange.

ConnectiCare Benefits Inc. requests a 7.4% average increase, with a range of 6.4% to 9%, to cover 73,465 individuals. 

The largest average increase for on-exchange plans is sought by ConnectiCare Insurance Co. Inc., which is offering the same rates both on and off the state exchange. It seeks a 12.5% average increase, with a range of 10.8% to 15.1%, to cover 4,392 individuals.

Also for off-exchange plans, ConnectiCare Inc. is seeking a 9.1% average increase, with a range of 9% to 10.1%, to cover 960 individuals.

In general, the department said, carriers attributed the proposed increases to:
The trend of rising health care costs, including the cost of prescription drugs and the increased demand for medical services.
The experience adjustment necessary to reflect deteriorating experience from the prior rating period to the current rating period.
Medicaid unwinding, which accounts for the impact to the current commercial market, and
COVID-19, to reflect related expenses in 2025 at a higher level than previously assumed.

The Insurance Department will conduct actuarial reviews on each filing to determine if they are justified and will either approve, reject or modify the request, it said. 

The minimum 30-day public comment period on all filings begins on June 7; comments can be filed online through the link that accompanies every filing or can be delivered to the Connecticut Insurance Department at P.O. 816, Hartford, CT 06142-0816.

The department expects to make final rulings on the proposals in early September. Open enrollment for the 2025 coverage year begins Nov. 1.

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