Health Insurance Premiums to Rise; Need to Watch Costs

02.01.2013
Issues & Policies

With the ongoing implementation of the federal Affordable Care Act (ACA) and establishment of the state’s health insurance exchange, it’s important to remain focused on a central need in the healthcare system–reducing costs. Affordability is key to increasing healthcare access.

But in 2014 many in Connecticut, and throughout the nation, will see their health insurance premiums rise—the result of changing rating factors and additional taxes and fees, among other reasons. 

That’s why Connecticut must not adopt any new measures that would increase costs and we should take a close look at our current health insurance laws and regulations and modify them where practicable to reduce cost. 

New Legislation

Despite the need to reduce costs, SB 596, currently before the Insurance Committee, would create an imbalanced marketplace where small businesses and their employees would be faced with less choice—which employers need to be able to contain costs.

CBIA is opposing the proposal, which requires the state exchange to directly negotiate rates with insurers, because it will lead to less competition in the market, stifled innovation, and it won’t help reduce costs.

What’s more, Connecticut businesses are struggling to understand the impact and requirements of federal healthcare legislation–especially when federal regulators have not yet finalized how the new healthcare law is to be implemented.

CBIA opposes creating further complications by adopting even more state regulations—yet the Insurance Committee is also considering Proposed SB 117 that would further regulate an already heavily regulated marketplace by capping premium increases based on age band adjustments.

CBIA believes the proposal is premature, and that, instead, market competition is the best way to drive down prices and increase choice.

Mandates

Although the legislature does not control all of the elements affecting premium increases there are certain steps the legislature can take to manage costs.  

One way to lower the cost of health insurance in Connecticut is to reduce the number of existing health benefit mandates. Compared with other states, Connecticut has a significantly higher number of health benefit mandates and that contributes to our higher premium rates. 

While any given health benefit mandate may not appear to create a significant expense, in the aggregate the mandates cause premiums to increase. Lawmakers should not only reject new health benefit mandates but also seriously consider reducing the number of existing mandates. 

What’s more, under the ACA, any new health benefit mandates will be a direct cost to the state and not be part of the Essential Health Benefit package offered through the state exchange.

For more information, contact CBIA’s Jennifer Herz at 860.244.1921 or jennifer.herz@cbia.com.

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