After a recently lost bid to increase insurance rates pushed Connecticut’s largest health insurer to consider leaving the state’s health care exchange, ConnectiCare announced Wednesday that it will stay.
ConnectiCare threatened to leave the exchange after a rate increase from an average of 17.4 percent to 27.1 percent was denied by the state’s insurance department earlier this month. The state had already permitted ConnectiCare to bring their rates up to 17.4 percent, but the company voiced concerns in an appeal against their rate-hike denial that they would “sustain financial losses that threaten its solvency” if forced to sell policies at the 17.4 percent benchmark set by the state.
In a press release, ConnectiCare President and CEO Michael Wise said his company will remain in the Connecticut Obamacare exchange despite these financial concerns, because of their greater concern for the beneficiaries of their plan.
“After hearing from state officials, providers and beneficiaries about the importance of our plan to Connecticut, we have decided to move forward into 2017 as a plan on the exchange at the rates approved by the [state insurance] department,” Wise said in the statement. “To that end, we have withdrawn our legal appeals with the courts and the department, and we have sent a letter to the exchange rescinding the termination notice that we sent to them on Friday.”
ConnectiCare, which insures 47,597 people through the exchange, is not the only insurance company reluctant to offer individual health insurance under Obamacare out of fear of debilitating profits. Currently, Anthem is the only other insurer still in Connecticut’s Obamacare health exchange, since United Healthcare and Healthy CT both began the process of leaving the exchange earlier this year.
Professor of diagnostic radiology, management and public health at the School of Medicine Howard Forman said such a phenomenon should not come to us as a surprise.
“Nobody can force any of the insurance companies to stay in the [Obamacare] market,” he said. “If they don’t believe that they can make a profit in the long run, they really have a responsibility to not be in that market.”
The possibility of ConnectiCare’s exit from the exchange left many frightened, as less competition in a market usually leads to higher prices for consumers.
ConnectiCare’s decision to stay in the exchange therefore came as a relief to many, including Lt. Gov. Nancy Wyman, who serves as chair of the Access Health CT Board of Directors.
“This is very good news for Connecticut consumers and for our health care marketplace,” Wyman said. “Since the inception of the Affordable Care Act, Connecticut’s top priority has been expanding access to health care … ConnectiCare has been a valuable partner in this effort to build a healthier state, a stronger workforce and a better marketplace for us all.”
Still, the threat of a future exit from the exchange looms, as insurance companies across the country are slowly backing away from Obamacare.
According to a November report by Robert Pear for The New York Times, many middle-class Americans cannot afford to even claim on insurance they have purchased because their deductibles and co-payments are too high. Obamacare, which relies largely on young and healthy people enrolling to offset the cost of caring for sicker people, has faced criticism from both sides of the aisle. That said, little has changed in the six years since its passage.
Forman said that both Democrats and Republicans have been unwilling to agree on ways to improve Obamacare and that this is a leading source of its ineffectiveness. Without this, Forman said, Obamacare will continue to be a source of its limitations for people of all political persuasions.
“There has never been a piece of legislation of this size that has not been followed with follow-up legislation that worked by Congress,” he said. “You can blame both the Democrats and the Republicans if you want to.”