Order of Supervision Placed on Small Connecticut Insurer

HealthyCT cannot sell new plans due to financial instability from risk adjustment fees.

Connecticut’s Insurance Department (CID) has recently issued an order of supervision for HealthyCT, a small insurer that sells plans in Connecticut’s Affordable Care Act marketplace.

The CID deemed HealthyCT financially unstable, which means that the non-profit program cannot provide insurance to its enrolled 40,000 people in the 2017 open enrollment period.

A statement from the CID said that the order of supervision was issued because of the large risk adjustment fee it is obligated to pay.

“Unfortunately HealthyCT’s financial health is unstable, having been seriously jeopardized by a federal requirement issued June 30, 2016 that it pay $13.4 million to the US Department of Health and Human Services, Centers for Medicare & Medicaid Services as part of the Affordable Care Act’s Risk Adjustment Program,” CID Commissioner Katharine L. Wade said in a press release. “As a result, it became evident that this risk adjustment mandate would put the company under significant financial strain. This order of supervision provides for an orderly run-off of the company’s claim payment under close regulatory oversight.”

Wade met with federal authorities about the risk adjustment program and how it is damaging to smaller insurers, and also met with Human and Health Services to express concerns; however, they have not modified their approach for the upcoming year, according to the CID statement.

For enrollees covered, no policies can be renewed after July 1, 2016, and no new policies can be written for prospective buyers. All plans will expire January 1, 2017.

However, individuals who are currently covered can continue to use their coverage and still be reimbursed for their claims. The CID said that the order of supervision does not mean there will be any change or lapse in coverage, and this order has been created to prevent that from happening.

They encourage policyholders to continue seeking needed medical care, filling prescriptions, and paying premiums.

“This is not an action that we take lightly but did so in order to immediately protect the company’s 40,000 policyholders in Connecticut and make certain that their claims will be paid under the terms of their policies and for the duration of those policies,” Wade said. “As regulators, consumer protection is our prime mission and an essential part of that is ensuring that carriers can honor their promises to their policyholders.”