HARTFORD, Conn. – The Connecticut Department of Insurance released its initial health insurance rate proposals for the individual and small group markets for 2025. Shortly thereafter, Aetna Life Insurance Company announced its decision to withdraw from Connecticut’s small group health insurance market, continuing a worrying trend among insurers and policymakers in the state.
Seven health insurers have filed eight applications for plans currently covering approximately 200,000 people (142,000 individuals and 58,000 small groups). The proposed rate increases are significant but lower than what insurers requested last year. The average individual rate increase request is 8.3%, up from 12.4% last year. The average proposed small group rate increase request is 11.9%, up from 14.8% last year.
In response to the rate hike requests, Attorney General William Tong said he would closely scrutinize each request and would play an active role in the process.
“Connecticut families and small businesses cannot continue to put up with these price increases year after year,” Tong said in a statement. “The burden is on the insurance companies to prove that every penny here is fair, and I will once again demand that insurance companies publicly explain all of the steps they’ve taken to negotiate and secure fair prices for the care they cover. Insurance companies can and must take responsibility for curbing these out-of-control costs. The decision here will have a significant impact on the cost of health care for every one of us.”
The price hikes are split between plans offered on state health insurance exchanges and those not. Among individual plans on the exchanges, Connecticare Benefits, which covers 73,000 people, is asking for an average price increase of 7.4%, while Connecticare Insurance Company, which covers just over 4,000 people, is asking for a double-digit increase of 12.5%. Anthem Health Plans, which covers 63,000 people, is asking for a 9% increase.
Among small group plans on the exchange, Anthem Health Plans was the only one to request a rate increase. Just under 38,000 people could see an average rate hike of 13.6%, the highest increase requested for 2025.
For off-exchange plans, Connecticare requested an average increase of 9.1% for the 960 people it covers in its individual plans. Oxford Health Plans (CT), which covers about 1,100 people, requested the lowest average increase of 5.1%. Oxford Health Insurance, which covers about 17,500 people, requested an average increase of 8.9%. UnitedHealthcare Insurance, which covers about 1,500 customers, requested an average increase of 9%.
Insurance regulators will review the request and may approve, deny or modify the rate increases requested by the insurer. The Department of Insurance is expected to make a final decision on the rate increases in early September, with enrollment set to begin in November for 2025. The public has 30 days to comment on the proposed rate increases and can do so by visiting the Connecticut Department of Insurance website.
Aetna retreats
In addition to the Insurance Department’s announcement of the proposed rate increases, Aetna announced earlier today that it would be exiting the state’s small employer market. Aetna will only renew existing plans through the end of the applicable plan year, making it the fourth insurer to exit the small employer market, following Cigna Health and Life Insurance Company’s most recent exit in May.
Auditor General Sean Scanlon said in a statement that the time for the state to act is now.
“For years, the insurance industry has rejected proposals that would create more choice and competition in the small group market, promising to improve the market itself, but that hasn’t happened,” Scanlon said. “With the number of available small group plans at an all-time low, it’s more important than ever for the government and businesses to work together to develop new options to help Connecticut businesses provide access to high-quality, affordable health insurance for their employees. With tens of thousands of Connecticut residents at risk of losing their health insurance, the time to act is now.”
Sen. Matt Lesser, a Middletown Democrat who chairs the Human Resources Committee, called on Gov. Ned Lamont to reverse the “death spiral” of the fully insured small group market.
“Unfortunately, critical time has been wasted by efforts to destroy the small group market,” Lesser said in a statement. “Consumer protections regarding stop-loss coverage for small businesses attempting to self-insure, consolidation of the individual and small group markets, expansion of Connecticut Covered, and reinsurance should all be considered. All of these ideas have garnered bipartisan support thus far and would help protect the fully insured market, as opposed to divisive failed proposals to abandon insurance entirely. These efforts failed to garner majority support in either Congress this year or last.”
