Is Connecticut in for "Rate Shock?"
Commercial insurers are very close to revealing the rates they’ll charge for healthcare plans under the new Connecticut healthcare exchange. It’s been a long, uncertain road to get here.
Connecticut was one of the first states in the country to get its exchange, called Access Health CT, up and running. It’s also a center of the health insurance industry, so it’s in the national spotlight. The commercial insurers themselves are highly reluctant to speak publicly about the process of putting together plans under the exchange, but their lobbyist, Keith Stover of the Connecticut Association of Health Plans confirms it’s been a difficult exercise.
“It’s sort of like, everybody’s shooting at the same target, but everybody’s also wearing the same blindfold.”
The same target because unlike in the commercial market, the benefit levels that the plans must offer are a fixed, known quantity, determined by the exchange. What’s completely unknown is who will sign up.
“You don’t really know what the population is going to be. We can all hope that it will be a hundred thousand people who are a fairly representative mix of ages and health status and all that, but you don’t know that.”
That actuarial uncertainty makes designing the rates a bit of a crapshoot, and insurers are making an extra effort to keep their costs low. Earlier this year that meant tough negotiations with doctors and other healthcare providers. Doug Gerard is a primary care provider in New Hartford.
“These companies are coming to us and presenting contracts to the doctors – doctors are going to be reimbursed at Medicare levels, or barely above. This is a good 35 to 40 percent under the commercial plans we have.”
And he says what that meant is, with those early offers, doctors weren’t playing ball with exchange plans.
“If patients sign up, come into the insurance exchanges and expect to find their doctor in there, in spite of what they’ve been told from Washington – that your doctor will be in the plan, you don’t have to change anything – the doctors aren’t signing up for the plans. If that continues across the board with all insurers, the insurance exchanges will fall flat.”
“From the exchange’s standpoint, there are certain things that we have the ability to influence and there are some things that we don’t.”
Jason Madrak is the spokesman for the exchange. He says they can’t, for instance, get involved in how doctors are reimbursed by the insurers, but they can insist on what’s called “network adequacy” – that the plan signs up enough providers.
“So we want to make sure that for the plans listed, consumers have some reassurances that they’ll be able to see a broad array of doctors, providers, go to a wide array of hospitals and other care facilities.”
Many people involved in insurance have talked about the possibility of “rate shock” – seeing rates climb sharply as the new healthcare law is implemented. The only insurer to publish its rates under the exchange so far, a new coop formed by the Connecticut State Medical Society, didn’t scare anyone, but the commercial pressures on the legacy insurers may mean a whole different picture by the time all the rates are in.