In a possible indictment of federal health reform in Connecticut, private insurance carriers covered 320,000 fewer people in 2011 ”“ an 11 percent drop.
The decline was driven by Aetna Inc. and UnitedHealth Group and its Oxford Health Plans subsidiary, which combined reported about a 70 percent drop in their plan enrollment in Connecticut ”“ if factoring in the Health Net members UnitedHealth had the option of inheriting following its acquisition of Health Net”™s Northeast subsidiaries three years ago.
Aetna spokeswoman Susan Millerick questioned the significant drop reported in the state”™s official figures, but offered no theory as to why the Connecticut Insurance Department count would be inaccurate. She attributed some of the company”™s decline to Aetna discontinuing its participation in the Connecticut HUSKY plan for low-income residents, after it was restructured to become an administrative services-only contract.
“I know 105,000 members left due to the Medicaid change, so factor that in,” said Millerick. “Frankly the higher number sounds questionable.”
Aetna was not the only one raising an eyebrow at the outlook for government Medicaid programs.
“The posture that states take varies market by market,” said Stephen Hemsley, CEO of Minnesota-based UnitedHealth, of Medicaid in a conference call addressing the company”™s second-quarter results. “If we see situations that we believe the state isn”™t prepared to sustain in a particular market, we will withdraw. ”¦ That discipline has to prevail, just like it prevails in other parts of our business.”
For the entire Northeast in 2011, Aetna reported a slight increase in the number of members it insures. In July, as Aetna geared up for this fall”™s open enrollment period, new Aetna CEO Mark Bertolini said the commercial pricing environment was competitive but “rational” in his words.
“I think the ”¦ pricing is so close that it”™s really hard to move clients,” Bertolini said in a conference call. “I would expect that you would see across the industry ”“ except for people that are re-pricing the books of business ”“ that their retention levels are going to be fairly high, so the ability to move business on the basis of pricing is very limited.”
UnitedHealth does not break out figures by region in its public reporting, but registered a 5 percent increase in membership nationally.
In Connecticut, CIGNA Corp. was the big gainer for a second straight year with a 175 percent increase in its own membership base, after establishing its headquarters in Bloomfield last year with state assistance. But it was not enough to offset an overall decline by the some 20 carriers selling health insurance in Connecticut.
ConnectiCare Inc. increased enrollment 6 percent in 2011; Anthem Blue Cross Blue Shield, the other major carrier offering HMO coverage in Connecticut, saw an 11 percent drop in overall membership in Connecticut.
In 2010, carriers had increased enrollment a meager 0.6 percent from 2009, when Congress enacted the Affordable Care Act (ACA) in an effort to get more people insured. Since mid-summer, carriers have been blaming higher premium rate requests in part on federal ACA mandates, in filings with the Connecticut Insurance Department over the past several months. For the most part, the insurance department has enforced lower-than-requested premiums, though in some cases it has still been amounting to double-digit percentage point increases.
Under ACA”™s “80-20” rule, carriers now have to devote 80 percent of their premium revenue collected under many plans to medical payments, and 85 percent of their premiums for plans they offer large groups. Of Connecticut”™s HMO plans in 2011, only Trumbull-based Oxford Health missed the 80-20 cutoff in Connecticut, and just barely at 79.2 percent.
CIGNA, meanwhile, spent all of its indemnity plan premium dollars on health expenses for members in 2011, reporting a 104 percent medical loss ratio.
ConnectiCare”™s HMO plan cleared the 80 percent hurdle, but its indemnity plan was well off the benchmark at 73.3 percent.
