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May 15, 2024

Report: Healthcare costs in CT rose 4.8% annually over two decades

HBJ Photo | Skyler Frazer Flanked by fellow legislators and business leaders, state Sen. Tony Hwang (R-Fairfield) speaks outside the Bushnell Performing Arts Center in Hartford to push the General Assembly to approve association health plan legislation this session.

Healthcare costs in Connecticut rose at an average rate of 4.8% annually per person from 2000 to 2020, according to a new report from the Office of Health Strategy (OHS), the state’s healthcare regulator, which called the increases a “profound burden on families and businesses.”

OHS released its Cost Growth Benchmark Initiative 2021-2022 Performance report this week, citing data that shows per-person healthcare spending in the state has rapidly increased since 2000.

Per the report, the average family premium for employer-sponsored coverage nearly tripled during that time period, rising from $8,781 in 2001, to $24,746 in 2022. More than half of Connecticut residents receive their healthcare coverage through their employers, so this represents a huge chunk of the population.

During that same period, inflation grew 61% and median household income grew 70%, the report said. This discrepancy has resulted in families spending a larger portion of their income on healthcare coverage, OHS said.

In addition to premiums, the employee contribution for family healthcare coverage has increased from $2,112, or 4% of median household income in 2001, to $6,299, or 6.9% of median household income in 2020. Family deductibles have increased more than 350% since 2002, OHS said in the report.

The legislature for several years has been floating ideas on how to mitigate rising healthcare costs. Earlier this year, the General Assembly’s Insurance & Real Estate Committee introduced House Bill 5247, which would have allowed qualifying chambers of commerce and trade associations to act as one large employer and offer their members self-funded health insurance benefits that would be strictly regulated.

The so-called association health plan legislation was one of the Connecticut Business & Industry Association’s top policy objectives this session. Advocates for the proposal say association health plans would help small businesses struggling with rising costs.

The committee never voted the proposal out before the deadline, which ended up killing it for the session. A similar bill failed to pass in 2023 as well.

Meantime, Bloomfield-based Cigna Healthcare and New York-based insurance technology company Oscar notified Connecticut policyholders this month that they will be exiting the state’s small group insurance market.

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