Hartford Business Journal

14 Hartford Business Journal • March 27, 2017 www.HartfordBusiness.com has lost some small business customers. The premium spikes have hit the small group market (employers with one to 49 work- ers) hard, with the average plan — sold on or off the state's insurance exchange, Access Health CT — experiencing a 12 percent rate increase. The volatile individual market was even worse, with the average Connecticut plan experienc- ing a nearly 25 percent rate increase. Those are some of the highest rate hikes in years and they occurred in many other states, heightening the political rhetoric around the need to repeal and replace Obamacare. More people using health services is con- tributing to the higher rates, as is a controver- sial "risk-adjustment" program adopted under the Obamacare, which aims to compensate insurers with sicker populations at the expense of those with healthier ones. Shopping normal in bad years When insurance rates are stable the pro- pensity for a group to change carriers is very low, Gutcheon said. Switching takes time and effort for both management and workers. It's not unusual, however, for businesses and individuals to comparison shop when insurance premiums spike. And in those years, at least one insurer tends to step up to try to scoop up market share. This year, Anthem, already the state's largest insurer, appears to be winning the market-share race in the small group market. Virtually all of Hensley's clients that switched carriers went to a preferred provider organiza- tion plan (PPO) sold by Anthem. Gutch- eon said many of his clients chose the same plan. PPOs, which are more common in Connecticut than HMOs, allow people to pay less for care if they visit a doctor in a preferred network. The plans also often include coinsurance and higher deductibles. Gutcheon and Kehoe — whose firms each have hundreds of clients and are not beholden to any specific carrier — said the Anthem PPO plan is relatively competitive both on price and for what it offers, and has enabled a number of clients to avoid sizable rate increases. It includes an overall deductible of $3,550 for an individual and $7,100 for a family, with out-of-pocket limits of $7,150 and $14,300, respectively, according to a copy of the plan obtained by the Hartford Business Journal. Copays to see a doctor for anything other than preventive care are $40 for a primary care visit and $50 for a visit to a specialist. Gutcheon said Anthem officials told him the insurer had a record-breaking enrollment month in January. Leslie Groundwater, an account manag- er at Robert Hensley & Associates, said she believes Anthem was surprised by the vol- ume it experienced in response to the plan, known as Silver Century Preferred 3550. "We had a lot of problems in January mov- ing our business there," Groundwater said. "[Anthem officials] weren't getting IDs back to us [fast enough]." Anthem did not respond to requests for comment for this story. Among the insurers that appear to be losing small group market share so far this year are ConnectiCare and Aetna, according to local experts. ConnectiCare currently has approximately 60,000 small group clients, making it a market- share leader. But it's fighting to hold on to those customers following an unprofitable 2016 that forced the company to increase average small group premiums 15 percent. "Certainly the rate action does not help us from a retention standpoint," said Eric Gal- vin, ConnectiCare's president and chief oper- ating officer, in a recent interview at the com- pany's Farmington offices. "It is an extremely tight race in the group segments. There's a lot of aggressive activity in the group markets." Galvin, who succeeded CEO Michael Wise earlier this year, said market-share wars are a near constant in the insurance business, but he said companies that undercut too heavily are likely to face consequences a few years down the road when they are forced to seek rate increases. ConnectiCare lost approximately $50 million in 2016, recording heavy losses in its individual market business and ceding its leading position in Medicare Advantage to UnitedHealthCare — something it hopes to regain in the next year by introducing a zero-premium plan, Galvin said. Individual market uncertainty With President Donald Trump and Con- gressional Republicans seeking to make good on a years-long pledge to repeal and replace Obamacare, there is plenty of uncer- tainty these days with Connecticut's Obam- acare exchange, Access Health CT. ConnectiCare is likely the insurer with the most at stake. The company added 16,000 new individual-market exchange customers this year, enrolling 69 percent of the 111,542 total customers that originally signed up for a plan sold through Access Health. (Nearly 10,000 of those customers have dropped their coverage since open enrollment ended Jan. 31.) ConnectiCare benefitted from the absence of HealthyCT, the nonprofit insurer that recently ceased operations. Meanwhile, the exchange's only other par- ticipant, Anthem, saw its market share drop. Anthem recently informed Access Health that it wasn't ready to commit to the exchange in 2018, given uncertainty at the federal level. Anthem is the only insurer that sells small group coverage on the exchange. It also sells individual health plans. ConnectiCare said it hopes to offer individ- ual health insurance on and off the exchange in 2018, but hasn't made a final decision. Access Health CEO Jim Wadleigh said last week that exchange employees have been taking calls from customers who are cancel- ling their recent enrollments, due in part to the prospects of a new federal healthcare law replacing Obamacare. The gist, Wadleigh said, has been: "I want Trumpcare, please drop my insurance." That's despite the fact that Congress hasn't yet adopted a new healthcare law. "There is confusion out there that people don't think they have to have insurance any- more," he said. Stricter paperwork rules — aimed mainly at stopping people from signing up for insur- ance only when they need it — are also curbing enrollment. There are currently 9,700 customers who owe documentation to Access Health, and they could lose coverage by June if they don't provide it. n from page 1 Businesses seek lower-cost health plans Health Insurer Market Share in Connecticut (as of 2015) Individual Small-Group Customers Large-Group Customers Customers (1-50 employees) (51+ employees) Aetna 6,341 60,911 331,845 Anthem 50,391 33,488 1,121,266 Cigna 669 12,673 369,325 ConnectiCare 75,405 60,406 102,890 Harvard Pilgrim 0 13,849 8,709 Oxford 0 17,702 25,723 UnitedHealth 7,235 279 123,468 S O U R C E : C I D I N S U R E R S U R V E Y S Katie Kehoe, head of sales and marketing, Robert Hensley & Associates ConnectiCare's new President Eric Galvin is fighting to maintain small group market share after an unprofitable 2016 forced the insurer to raise its rates. ▶ ▶ Brokers say higher- than-usual premium increases this year have led a significantly larger percentage of companies to switch carriers or insurance plans. 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