Anthem Blue Cross Blue Shield of Connecticut wants such high rate increases for its individual health insurance policies, it agreed to a public hearing Monday so officials could analyze what's usually confidential information.
Increases of up to 32 percent are critical, Anthem officials told those who attended the hearing, because of two "drivers" -- health care costs and use of expensive, high-tech drugs and devices.
"The reality is that we are facing unprecedented increases in the cost of health care services," said George Siriotis, regional vice president for Anthem.
Just after he called the rate increases critical, critics got up and left, chanting, "public insurance now," once they got outside of the hearing room.
Siriotis resumed his testimony, saying the public insurance, Medicare and Medicaid, typically pay only 70 to 90 percent of providers' bills, so private health insurance plans have to cover that as well as the soaring costs of health care.
"There is an explosion of MRIs," he said, and up to 40 percent of imaging is not necessary. An MRI, he said, can cost $1,000 and a defibrillator can cost $10,000. A Anthem expects a 16percent per year increase in claim costs, justifying rate increases in Anthem's view of 22-32 percent.
He said 80 cents of every dollar Anthem collects in premiums goes to pay for hospital services, physician services, lab services and prescription drugs.
The rest goes for claims processing, risk and profit, he said.
Under questioning from the hearing board, however, the Anthem officials could not break down how much went to cover risk and how much went to provide profit, fueling opponents.
"The company's already charging consumers for risk," said Attorney General Richard Blumenthal, who intervened to cross-examine Anthem officials and the Office of Health Care Access. "It builds a surplus to cover deteriorating business conditions. Now it wants to add charges, in effect, to double-charge consumers simply to enhance its profits.
"There is absolutely no factual basis for this gargantuan, outrageous rate increase," Blumenthal said.
The rate increase would take effect Oct. 1 for Anthem's 56,000 individual health insurance policy holders if approved by the Insurance Department. It has 30 days to issue an order.
Ralph D'Agosta, a small business owner from New Preston, was to testify for Blumenthal, saying his premium had increased 14.5percent since February and 77.5 percent since 2005.
"I've had to take on a second job in order to perform and meet my needs for my family," said D'Agosta. "This policy right here that's going into effect is definitely gonna make it so that I'm not gonna be able to have health insurance."