It hasn’t been a particularly good year so far for Access Health CT (AHCT), the state’s health insurance exchange.
In April, United Healthcare — the insurance wing of UnitedHealth Group, the largest writer of coverage in the U.S. — said it plans to withdraw from almost all Affordable Care Act state exchanges, including AHCT, by 2017. In July, nonprofit co-op health insurance company HealthyCT was suspended by the Connecticut Insurance Department (CID) from writing any new business, citing its “hazardous financial standing.”
Those moves have halved the exchange’s carriers, and AHCT CEO Jim Wadleigh said he’s in talks with the remaining Anthem and ConnectiCare to maintain their financial viability in the state.
“Yes, there is concern,” Wadleigh said. “It’s always a concern when the overall landscape of your marketplace is getting smaller.”
He added, however that “both companies have been pretty close to breaking even or being profitable over the last couple of years.”
Executives at Anthem and ConnectiCare could not be reached for comment.
As for United dropping out, Wadleigh said, “There are market forces at work here. United found both in Connecticut and nationally that they could not be competitive in this space. United was a good partner, but their rates were much more expensive than Anthem, ConnectiCare and HealthyCT — and they still were not profitable in the space. Maybe the exchange industry is not the right business model for them.
“Our challenge is to take a long-term look at continued sustainability, both for the carriers and for ourselves,” he continued. “What Access Health can control is if we have the right plan designs to build the right networks for consumers.”
Potential rate hikes by the carriers are also lurking. Anthem, whose plans cover roughly 56,700 residents, has requested an average 26.8 percent rate increase for individual plans offered on and off the exchange. ConnectiCare has asked for an average 24.3 percent increase for individual plans offered off the exchange, which cover 37,142 people.
Even Aetna, which is not a part of the exchange, is seeking a 27.9 percent increase for its off-exchange plans, which cover 6,346 people. That company has announced it will withdraw expansion plans for all Affordable Care Act exchanges in response to combat significant financial losses.
The CID is holding hearings over the proposed rate hikes over the next several days.
“Rates we have no control over,” Wadleigh said. “That’s an insurance company thing. But we’ve had, and will continue to have, discussions with Anthem and ConnectiCare about what levers Access Health has from a long-term sustainability perspective.”
He added that AHCT is actively seeking other carriers — presumably no longer including Aetna — to join the exchange. “In the conversations I’ve had, I highlight the stability of our system, the knowledge of our employees in the space we are in. From an operational perspective, our organization is easy to work with. We have to determine the right rates and circumstances for those organizations” to join, he added.
The turmoil in Connecticut is also being felt nationwide, Wadleigh said.
“Health care costs are increasing faster than inflation, and we as a country have to continue to work on how we can reduce expenditures,” he explained. “Nationally, we are seeing the concept of narrower networks of physicians, PCPs [primary care providers] and specialists for consumers to choose from, which results in lower long-term deductibles and rates.”
The current situation is different than from when the Affordable Care Act created the exchanges, which included AHCT in 2014. “When the exchanges started, we were required to have very broad networks for consumers to select from for access to every carrier and hospital,” Wadleigh said. “There is a cost to that.”
Very broad networks generally work for large employers with employees living around the state, he added. As a result, “the consumer is willing to change their preferences to obtain lower deductions and costs,” leading to narrower networks.
For all the upheaval, Wadleigh said, “The health of the exchange is good. We have a sustainable budget, and were one of the first to have a sustainable budget when we started two years ago. We are generating the right amount of income to stay in business. Month-to-month, day-to-day, we are looking at ways to reduce expenses to rein in costs and lower our operational expenses. I’m comfortable that we have the right financials.”
The success of AHCT is in the numbers, he added. “Four years ago the uninsured rate in Connecticut was 8-12 percent depending on what data you looked at. Now we’re at 3.8 percent — the Kaiser Foundation says we’re around 6 percent. Either way, there’s been a very dramatic decline in the uninsured rate.”