What is Health insurance?

Health insurance is a contract with a licensed insurer in your state of residence that requires the health insurer to pay some or all of your costs of health care in exchange for a premium under the terms of the policy purchased. Health insurance is provided in several methods as insurers work to contain costs and the risks they take on from consumers.

It is important for you the insured to read and understand policy provisions before purchasing health insurance.
In the United States, the CDC estimates that 65% of people under the age of 65 are covered by some part of private insurance either through an employer or via direct purchase policies.

The state has provided this FAQ to answer common Healthcare Reform related questions.

Effects of the Affordable Care Act and subsequent Federal changes to Connecticut residents.

  • The ACA has reduced the uninsured rate in Connecticut by 45% and created coverage access for over 150,000 residents according to the Connecticut Health Foundation.
  • Access Health CT is one of the top state-run healthcare exchanges in the country.
  • In 2017 the Connecticut Insurance Department requested that exchange carriers submit rates with the assumption that federal cost-sharing reductions would not continue.
    • The resulting rates provided by carriers increased by approximately 29%
      • Anthem 31.7% Increase for their 35,500 policyholders.
      • ConnectiCare Benefits Inc 27.7% Increase for their 50,907 policyholders.
  • In 2017 several state exchanges wrote to congress to address issues facing the exchanges and health insurance markets for their respective states.
    • Request to provide consistent funding to cost-sharing reduction payments,
    • Create a structure for a federally funded reinsurance program to replace the temporary structure which expired.
  • In October 2017 the department of health and human services (HHS) announced that Cost Sharing Reduction payments would end unless Congress appropriated funds.
    • In many states insurers who opted to leave the state exchange did so in part due to the expected loss of the CSR-related policy revenue.
    • Approximately 43% of Connecticut residents enrolled with silver plans which have the CSR component was impacted by the change.
    • Many insurers assumed that both the individual mandate would not be enforced and that the cost-sharing reduction would end which they built into 2018 rate submissions.
    • The Kaiser Family Foundation noted that the elimination of the Cost Sharing Reduction component may end up costing the federal government more in the long term with over 20% of the cost-shifting to premium subsidies for those meeting income criteria within the law.
  • The impact of the Federal decision to eliminate the cost-sharing subsidy resulted in an increase to all residents.
    • There were a total of 83,156 Connecticut residents who relied on both the APTC and the CSR subsidies for their healthcare plan
    • There were a total of 53,374 who specifically relied on the CSR or roughly 64% of those enrolled in an exchange plan.
  • In 2018 Access Health CT (The State Exchange) required insurers to offer one standardized silver plan.
  • During the 2018 legislative session, state lawmakers considered legislation to implement an individual mandate at the state level and a reinsurance plan.
    • Two bills were introduced — H.B.5039 and H.B.5379 to create the individual mandate however neither passed in the 2018 session.
      • H.B.5039 was straightforward in which Adults who met the penalty criteria would be taxed at 2% of household income or $500 per uninsured adult
        • This was less than the penalty within the ACA
        • The penalty was later stripped from the bill however other benefits and requirements on health plans remained.
        • The bill however never made it to a full house vote and eventually died when the legislative session ended.
      •  H.B.5379 incorporated ideas proposed by a Yale Economist which would be more radical than the straightforward mandate of the ACA
        • Economist Fiona Scott Morton proposed the Connecticut Individual Healthcare Responsibility Fee 
        • The fee on balance may have been a superior way to align risk to those taking it at the expense of others.
          • The fee would increase the penalty to up to $10,000 for households making just over 100,000 if they choose to remain uninsured.
          • The penalty would be equal to the lowest-cost silver plan on the exchanges after applying any premium subsidies.
          • The penalty would also be capped to no more than 9.66% of income or $10,000 whichever is less. 
          • The penalty would have been directed to a health savings account administered by the exchange where the household could withdraw from to pay healthcare expenses.
        • While a brilliant way to ensure that Connecticut residents keep or have access to the penalty they pay the bill did not advance in the 2018 session.
        • There is still hope that it will be reconsidered in future sessions.
    • The bill H.B.5114 was introduced to create a reinsurance program and an individual mandate but the bill failed to advance and lacked details on its full purpose.
      • The text of the bill directed the Connecticut Department of Revenue Services to establish an individual mandate and the associated tax penalty.
      • It also called for the creation of an Affordable Health care Fund, a health insurance verification program, and the creation of a task force to develop a reinsurance program.
      • If this bill had been completed the key item would be the “State innovation Waiver”
        • In theory, this provision if coupled with the proposal by economist Fiona Scott Morton would have allowed for
          1. Federal Pass-through funding to partially finance the state reinsurance program.
          2. Allowed the state to create a backstop for high-risk enrollees which would in turn ease the total cost borne by insurers thus making overall premiums lest costly.
          3. Allowed the state to potentially capture the amount state residents would have received on tax credits and cost-sharing subsides.
        • It is not clear if the state innovation waiver will return in future legislative sessions.
  • In May 2018 Governor Malloy Signed H.B 5210 into law which further moved to protect Connecticut residents. (Public Act 18-10)
      • The bill mandated insurance coverage of essential health benefits
      • The bill expanded mandated health benefits for women and children
      • The bill expanded contraception benefits.
  • In July 2018 The two carriers remaining in the Connecticut Health Exchange (Anthem, and ConnectiCare) submitted rate filings to the state for 2019 rates.
    • The carrier provided rates for 2019 included an increase for individual plans of 12 percent on average.
    • The carrier provided rates for 2019 included an increase for small group plans of 10 percent on average.
    • The key cost driver highlighted by both carriers were the cost of services rendered and the demand for services.
      • One key difference to other states is that the state of Connecticut has mandated that pregnancy become a qualifying event to allow enrollment via the exchange.
      • The removal of the individual mandate was priced into 2018 rates so the actual federal removal of the mandate had negligible effects on rates.
  • In September 2018 the Connecticut Insurance Department finalized rates for 2019
    • Some customers of both providers will see a reduction in the cost of their individual coverage for their 2019 rates which will benefit Connecticut families. 
    • There was a video broadcast of the hearing which occurred on September 5th.
    • Public comments were collected as well as open questions to the carriers. 

Contact Us today to discuss health insurance options for yourself or your business.