More than 9,500 people enrolled
in the state-run Charter Oak Health Plan will see their premiums jump by at
least 45 percent and possibly as much as 67 percent starting Sept. 1 as the
state cuts its subsidies for the program.
The premium increases stem from
the cost of health care claims in the program and the tight state budget, said
David Dearborn, a spokesman for the state Department of Social Services. The
current biennial budget prohibits
the state from subsidizing the cost of covering any new or recent enrollees,
requiring the plan's premiums to reflect the cost of medical claims, which they
currently do not. The budget also lowered the premium subsidies that some
low-income enrollees receive in the program, which Gov. M. Jodi Rell launched in 2008 as a way to cover uninsured adults.
"Since its beginning in
2008, Charter Oak has generally attracted an older population with more chronic
health care conditions than originally anticipated, leading to higher-than-anticipated
costs," Dearborn
said. "Consequently, premiums were adjusted for the higher program costs
after actuarial analysis of service utilization data through claims."
Charter Oak currently has 9,727 members. Of them,
5,060 will see their monthly premiums increase from $307 to $446 in September.
Another 4,667 receive state
subsidies for their premiums and will continue to receive them, but at lower
levels. The subsidized rates are offered on a sliding scale based on income
level and currently range from $129 to $239. As of September, they will range
from $215 to $369. Those earning below 185 percent of the poverty
level--$20,146.50 for a single person--would face the highest proportional
increase of 67 percent.
The subsidized premiums are
only available to people who were in Charter Oak before June 2010.
DSS Director of Medical Care
Administration Mark Schaefer said earlier this month
that the new premiums will likely make the plan unaffordable to some current
enrollees and potential new members. But he said the higher premiums were
unavoidable.
The increased costs will come
with some additional benefits. In the past, the plan came under fire for
limiting coverage to $100,000 a year and $7,500 a year for prescription drugs.
After September, the limits on annual coverage, prescription drugs and a $4,000
cap on durable medical equipment will all be rescinded. Members who get
subsidies for their deductibles and co-insurance will also continue to get the
same subsidies, Dearborn
said.
The budget legislation also
changed the eligibility rules for Charter Oak to prohibit anyone from joining
who could qualify for the state's Pre-Existing Condition Insurance Plan, or PCIP, a
federally subsidized program created as part of the health reform law.
The state is trying to get more
people to enroll in PCIP, which so far only has about 70 members.
One barrier to PCIP enrollment
is that for anyone 30 and older, Charter Oak is less expensive--for now. PCIP premiums are based on age,
and range from $242.66 to $893. But DSS is seeking permission from the federal
government to make the PCIP premium a flat rate that would be more affordable
to most enrollees. The department proposed charging $381 a month, although the
figure could change based on what the federal government allows.
Another barrier to joining PCIP
is that, under federal rules, people are only eligible if they have not had
health care coverage in the past six months. People who meet the PCIP
qualifications but have had health insurance more recently will still be
allowed to join Charter Oak. But Charter Oak members who find the premium
increases unaffordable would not be allowed to join PCIP, possibly lowering
their premium, unless they first give up health insurance for six months. Since
people eligible for PCIP have at least one medical condition, going without
health insurance for half a year could be particularly problematic.
Rell last year tried unsuccessfully to get
the federal government to drop the six-month requirement