Meskers: Why I Spoke out Against Insurance Rate Increases

The following is excerpted from comments made by State Rep Steve Meskers (D-150) to the Insurance Commission on August 15 concerning proposed health insurance rate hikes by insurance companies in Connecticut:

As a resident of Connecticut, a state representative and specifically as a member of the State Legislature’s Insurance Committee it’s obvious to me that our healthcare costs are on an unsustainable trajectory. We’ve seen the rising cost of hospitalization, pharmaceuticals, and ultimately of our insurance premiums as we seek to cover ourselves and our loved.

As I read through, and listened to, myriad criticisms levied on the Connecticut system and various complaints about unfunded mandates, I am convinced that those arguments detract from the real story.

What is abundantly clear to me having worked on Wall Street for over 30 years is that healthcare providers and insurance carriers lack transparency, and without transparency, real competition and fair pricing has been unobtainable for too many years. My constituents can’t go to the doctor and price out any medical procedure they’re about to undergo. There’s no visibility into what “fair prices” means when there’s no transparency into the costs for a doctor’s visit, a prescription or a trip, God forbid, to the Hospital. We must do better.

Some of the issues like the astronomical price of drugs like insulin may be addressed in coming years through federal legislation, but can’t we act sooner for the residents of Connecticut?

Pharmaceuticals in general cost on average 3 or 4 times more than comparable prices in the OECD according to a recent House Ways and Means report.

This past week the US signed the Inflation Reduction Act and yet these same insurance companies before us today have been silent and refuse to recognize the opportunity that negotiated drug prices may represent for all of us. I would have hoped that the insurance industry would have supported the idea to have all private plans included in the negotiated price initiative. Why haven’t they?

In fact, my major concern as a member the Insurance Committee has been the lack of input from the industry regarding government sanctioned regulations that would in fact improve competition, reduce healthcare costs, and ultimately reduce insurance costs to their customers. The only time the industry engages seem to be attempts to limit mandates which ultimately are designed to improve and force coverage for a limited number of medical issues. Those mandates, serve to make tenable the costs of some procedures and medications that would otherwise be unaffordable.

Going forward, I have asked the Insurance Commissioner and the industry to approach the state and federal delegation with specific legislative requests related to the cost of pharmaceuticals and to address the lack of competitive pricing in the hospital industry. I have asked for guidance from the insurance industry on how we can change regulations to allow insurers to improve their negotiating strategies and to position insurance companies with a stronger competitive position in their relationships with hospitals and pharmaceutical companies. The task of hammering down the costs of healthcare needs to be done together.

The insurance industry provides a vital and incredibly dynamic function in the State of Connecticut. I recognize and celebrate its history as one of the cornerstones of the Connecticut economy. However, there is a responsibility and a trust we place on this industry which is failing us.

As a State Representative I’ve heard testimony from hospitals, the pharmaceutical industry, and the insurance industry. That testimony would seem to conclude that we’re doing a wonderful job in overseeing the industry and that our only role or job should be to control or limit mandates we issue. But the Mandates are designed to improve coverage for illnesses or to help prevent them. We mandate coverage of insulin with a cap on the cost and we mandate coverage for detection of breast cancer. These and similar mandates are designed to improve health outcomes. They address some of the outlier, outrageous costs of the healthcare industry. I realize they need to be closely watched. But these mandates are not the cause of the affordability crisis which is nationwide.

We are headed off a cliff of un-affordability.

The health insurance industry has must do its share of innovating strategies to protect their clients, the residents of Connecticut.

The first shot in the long struggle has taken place with the Inflation Reduction Act which authorized the governments to negotiate drug prices for our Medicare system. I look forward to hearing comments from the industry that are supportive of that negotiated stance The time for the outrageous subsidizing of the global consumption of pharmaceuticals, through our increased costs of drugs, is past.

To be clear I understand the pharmaceuticals industry needs to make a profit. But I’m not sure if that needs to be reflected in 20% to 30% higher prices than in the rest of the world. In any case, it should be sufficient to ensure that they do the research and development here in the United States and specifically in Connecticut. But the idea that they should price their drugs at 4 or 5 times what other countries pay is absurd, the model is unsustainable.

Absent real and actionable recommendations from the insurance carriers to create a more competitive market and to effectively control and/or negotiate healthcare costs I urge rejection of the proposed rate increases.