Insurers in Connecticut continue to report high profits, despite the ongoing struggles patients face with healthcare costs. The recent approval of a double-digit increase in health insurance premiums by the Connecticut Insurance Department only adds to the burden on patients. This increase, following a similar one last year, forces patients to choose between more expensive comprehensive plans or more affordable plans with limited coverage and high out-of-pocket costs. The consequences of these changes cannot be ignored, as healthcare costs continue to cause hardship for patients across the country.
Data from the Kaiser Family Foundation in 2022 revealed that four in ten adults have postponed or gone without medical care due to financial constraints. As practicing physicians, we witness the negative impacts of this choice on a daily basis, especially within Black and Hispanic populations and those with lower incomes. Even among the insured population, roughly one-third worry about affording their monthly premiums, and a staggering 44% express concerns about meeting their deductibles before health costs are covered.
The American College of Physicians advocates for a healthcare system that provides coverage and access to care for all individuals at an affordable cost. Reforming payment and delivery systems is crucial in prioritizing patients’ interests by supporting physicians and care teams in delivering high-value and patient-centered care. Additionally, the health system should address social factors that contribute to poor and inequitable health and remove barriers to care for vulnerable, underserved, and disadvantaged populations.
The current situation is a clear example of how cost remains a significant concern, and efforts should be focused on controlling premium increases that burden insured individuals struggling to pay for their medical care. Our practices are filled with stories of patients who forgo or ration essential medications, leading to preventable complications. For instance, some patients delay recommended diagnostic follow-ups due to costs, resulting in a delayed cancer diagnosis. Others have suffered eye damage from diabetes, strokes from high blood pressure, or recurrent hospitalizations for congestive heart failure – all potentially preventable if they could afford crucial medications. Many patients struggle to live independently due to high copayments required for necessary devices like walkers, shower chairs, and bedside toilets.
Although the requested premium increases of 12.4% for individual health plans and 14.8% for small group policies were reduced to 9.4% and 7.4%, respectively, these increases are still substantial. They exceed the nationwide median proposed increase of 6% and dwarf the growth in health insurance spending over the past two decades. The Administrative Healthcare Advocate, Sean King, aptly says that if families and employers are forced to cut their operating margins to afford healthcare, insurers should also experience some of that financial strain.
Administrative spending in the United States is nearly four times higher than in comparable countries and contributes to the increasing healthcare expenditures. As part of the regulation and review process of rate change proposals, insurance carriers should disclose the portion of premiums spent on administration fully and uniformly. This should include a breakdown of premium dollars allocated to marketing, claims processing, administrative expenses, profits, reserves, and payment for covered benefits.
Pandemic-related costs have been cited as one reason for the premium increases. However, despite decreased utilization during the COVID-19 pandemic, the four major profit-driven health insurers saw a 200% increase in operating earnings. Prescription drug pricing remains a significant driver of healthcare costs, and inconsistent access to medications contributes to poor health outcomes that need addressing.
Direct payments for inpatient and outpatient care continue to be the largest expenditure category, and the Affordable Care Act (ACA) mandates that an appropriate percentage of the premium be allocated to patient care. In the individual and small group markets, a maximum of 20% of revenue can be spent on administration, marketing, and profit. Any costs exceeding this limit must be returned to consumers as rebates. In recent years, over 80% of rebates have been given back to consumers on these individual and small group plans requesting rate increases. In 2023, estimated rebates will reach $1.1 billion against the backdrop of proposed increases.
Addressing these drastic annual premium increases is essential, and efforts must be based on transparent data. Transparent data and a streamlined process are needed to ensure accurate assumptions on which rate increases are based, as highlighted by Attorney William General Tong. Payment reform is critical, with a focus on transforming the reimbursement and delivery of healthcare, promoting value-oriented care over volume-based care. Emphasizing team-based care, prevention, and cooperation and coordination among healthcare professionals will lead to better patient outcomes and cost savings.
Price and quality data must be transparent, enabling patients, employers, and payers to make informed decisions about the actual costs and quality of healthcare services. Allocating resources based on medical efficacy, clinical effectiveness, and need – while considering cost – ensures that limited healthcare resources are directed to cost-effective services for those who need them most.
The solution to this problem is complex, but we cannot continue to burden consumers with increasing costs while health insurance companies enjoy high profits in an inefficient system. It’s time to prioritize patients and find ways for Connecticut to lead the way in addressing these escalating costs. Our patients must come first.
Dr. Ruth Weissberger is the Governor of the CT Chapter of the American College of Physicians, and Dr. Anthony Yoder is the Co-chair of the chapter’s Health and Public Policy Committee.