Hartford Business Journal

14 Hartford Business Journal • November 7, 2016 www.HartfordBusiness.com from page 1 Learn from Dave how to: • Manage, supervise and motivate your people • Develop coaching plans to improve individual team performance • Establish a profile for identifying and assessing new hires • Determine predictable and repeatable metrics for success • Transform and grow your leadership skills Building a world class organization 45+ Years 250 Training Facilities 30 Countries 18 Languages To register, visit: peaksalesperform.sandler.com/mattson or call (203) 264-1197 Seating is limited and registration is required! Includes breakfast, a subscription to the Hartford Business Journal and Dave's tips for managers. Dave Mattson, CEO and President of Sandler Training Corporate, best-selling author, keynote speaker and internationally recognized sales and management expert, will be in Farmington, CT to deliver a presentation on best practices for building a world-class sales team. Friday, November 18 | 9:00 am - 11:00 am 6 Waterside Drive, Bldg. 10 | Farmington, CT Build a sales culture to achieve maximum results. Insurer hopes for smoother 2017 exchange plans sold to individuals. The com- pany attempted to modify that request on Aug. 23 to 27.1 percent, citing recent jumps in claims and other factors. When the Insurance Depart- ment rejected the revision and approved a 17.3 percent increase, ConnectiCare threatened to leave the exchange and took the rare step of suing the state agency over the matter. After negotiations, ConnectiCare eventu- ally agreed to remain on the exchange with the 17.3 percent rate increase. Wise hopes for better 2017 ConnectiCare CEO Michael Wise said in an interview last week — the first he's granted since the conclusion of the rate case in Septem- ber — that he expects ConnectiCare's business lines to return to profitability in 2017. Many, including at least one Access Health CT board member, wondered why the com- pany decided to stay on the exchange follow- ing its unsuccessful lawsuit that alleged the approved 17.3 percent rate hike could "endan- ger ConnectiCare's solvency." Asked about the change of heart that appeared to occur over a September week- end, Wise pushed back. "All along there was a consistent mes- sage from us that we wanted to find a way to make this work," Wise said. "From that van- tage point, I would say we really never had a change of heart." Wise said the company's decisions to sue and then remain on the exchange were not easy, and required balancing the interests of the company and its customers. "They're not easy business decisions, but we believe we made the right ones," he said. While the insurer wanted a bigger rate increase for exchange plans, other rate hikes approved by state regulators, including a 38 percent increase on health plans it sells to individuals outside the exchange, will improve ConnectiCare's financial position next year, Wise said, though it will also hit thousands of consumers' wallets. Wise said ConnectiCare is also working with its pharmacy benefits manager, which negotiates drug prices and processes claims, to further reduce costs. The insurer is also focusing on paring administrative expenses, and is opening storefront enrollment centers to help offset the loss of third-party brokers in this year's open enrollment period for plans sold through Access Health CT. The centers will also assist off-exchange customers. "We're very optimistic about the future," Wise said. "We expect to have a strong 2017." There are still concerns, however. One is the Affordable Care Act's risk- adjustment program, which aims to com- pensate insurers with sicker populations at the expense of those with healthier ones. A number of insurers and Connecticut regula- tors have criticized the program's design as more favorable to large insurers. ConnectiCare's off-exchange division has been "battered" by the program over the past three years, forcing it to pay out $100 million to other insurers, including $37.1 million this year, ConnectiCare CFO Eric Galvin testified to Insurance Department officials in August. Meanwhile, Anthem — the only other insur- er participating in the Connecticut exchange after UnitedHealthcare and HealthyCT left — will receive nearly $51 million from the risk- adjustment program this year. Risk adjustment was the nail in the cof- fin for HealthyCT, the small nonprofit insur- er that was ordered into runoff in early July after being hit with a $13 million payment. Wise said he continues to advocate with other insurers for changes to the program. Other 2016 challenges ConnectiCare has also experienced a steep increase in health claims this year as more customers utilized more services. That pushed the company's loss ratio — a key calculation that expresses what percent- age of premiums an insurer is paying out for medical claims — to the highest levels in at least five years. The off-exchange business paid out 99.5 percent of its premium revenue on claims in the first six months of this year, up from 80.7 percent for the first half of 2015, while the on-exchange division had a loss ratio of 93.1 percent, up from 75.3 percent, according to A.M. Best's reports. Galvin said insurers expected Obamacare to cause an increase in utilization, due to pent-up demand from individuals who were previously uninsured. But insurers also expected that spike to level off. "But rather than stabilize, that cost has continued to skyrocket and we see no end to that higher level of spending," he said. As an insurer heavily focused on Con- necticut, with no exchange business in any other state, ConnectiCare's financials offer a unique window into the state's health insur- ance market. Whether Anthem suffered the same down- turn in Connecticut earlier this year, howev- er, is unknown. As a publicly-traded company with exchange business in more than a dozen states, Anthem doesn't break out its individ- ual state results. However, there is some indication Anthem may be in a similar boat in Connecticut with regards to exchange plans. Anthem revised its annual outlook in late July, saying medical costs wiped out its previous hopes for a slim profit on its overall exchange business, which broke even in 2015 and made money in 2014. The Insurance Department ultimately allowed Anthem to increase its 2017 exchange plan rates 22.4 percent, compared to an origi- nal request of 26.8 percent. g P H O T O | A R I E L L E L E V I N B E C K E R / C T M I R R O R . O R G ConnectiCare vice president and chief actuary Neil Kelsey testifies in front of the Connecticut Insurance Dept.

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