Governor’s SB11 veto leaves much work for consumers

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By Consumers Union on Monday, July 25th, 2011

Connecticut residents finally got a break from huge health insurance rate hikes in December when the state’s insurance department rejected a 20 percent requested increase from Anthem Blue Cross Blue Shield.

Unfortunately, this one rejection was the exception, not the rule. Connecticut has a history of approving double-digit rate hike requests. A recent study from the Office of Legislative Research found that the Connecticut Insurance Department approved rate increases exactly as requested by insurers in 22 of 26 cases since 2006, often with little to no public debate.

To fight back against these continual rate increases, state lawmakers and advocates worked on a new law earlier this year to open up the rate-setting process to public scrutiny.  SB11 created a new system so families harmed by these ever-increasing premiums would have a say. If a company wanted to raise rates more than 10 percent, a public hearing would be held where the state’s healthcare advocate and Attorney General could intervene on behalf of consumers. After much compromise, in June, with overwhelming bipartisan support the General Assembly passed the bill,  but then shortly after Connecticut Gov. Malloy vetoed the bill.

We were disappointed in Governor Malloy’s veto, and disagree with his position that the estimated cost to the state of improved transparency and oversight would outweigh the benefit to consumers. Strong oversight can result in big savings — in Oregon, for example, policy holders will save $12 million thanks to their state’s strong oversight in a recent health insurance rate hearing.

While many of you urged your state lawmakers to override the Governor’s veto, the Legislature chose a different path, and agreed to a compromise not yet written in law that will give similar, but albeit reduced, protections as granted in SB 11. The compromise changes the threshold for triggering a public hearing from a proposed rate hike of 10 percent to 15 percent. And it reduces the number of public forums per year from 15 to four, dramatically reducing the opportunity for Connecticut residents to speak out on rate hikes.

Connecticut consumers have their work cut out for them to ensure that the Governor and elected officials at a minimum follow through on this compromise. If double-digit increases continue to be the norm, then with your help we will push the Governor and your lawmakers to go back to the drawing board and find an effective way to protect consumers from continual rate hikes.

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