You want to know whether Anthem Blue Cross and Blue Shield of Connecticut must justify Medicare supplement policy insurance rate increases to the Insurance Department, and if so, what the justification for the latest increase was. You also want to know what options are available to Blue Cross and Blue Shield policyholders.

Connecticut law requires Medicare supplement policy insurers seeking to increase rates to file the request with the Insurance Department at least 60 days before the effective date of the increase. The department must review and hold a public hearing on the request and either deny or approve it within 45 days of receiving it (CGS § 38a-474(a)).

Rate increase filing requirements include the following items:

1. a letter that describes each policy, including its benefits and terms and the marketing method used;

2. the rate and the period for which they are to be effective, including assumptions and factors used in calculating the rate;

3. the anticipated loss ratio over the lifetime of the policy and the expected future loss ratio projected through the period for which the rate will be effective;

4. a statement signed by an actuary certifying that the loss ratio is in compliance with state law; and

5. a table showing amounts proposed to be charged to consumers if the rate is approved (Conn. Agencies Reg. § 38a-474-2).

Anthem Blue Cross and Blue Shield submitted data showing that the loss ratios (the proportion which losses incurred bear to the earned premium) for its Medicare supplement policies (policies types A, B, C, D, and F) exceeded premium revenue. Blue Cross lost money on all of the above policies and sought substantial rate increases.

The Insurance Department approved the following rate increases:

· A-15. 68%

· B-13. 69%

· C-12. 53%

· D-13. 52%

· F-12. 53%

Two options are available to Medicare supplement policyholders: (1) to join a Medicare HMO where one is available thus eliminating the need to buy a Medicare supplement policy or (2) to shop around for a different insurer or policy type.

Fifteen insurers offer Medicare supplement policies, and 10 different policy types (policy A through J) are marketed in the state. A premium comparison is available on the Insurance Department's website: http: //www. state. ct. us/cid/medage

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