The California Department of Insurance will subject individual health insurance rate changes filed by the four biggest health carriers to an additional level of actuarial scrutiny, officials say.
The California department plans to give extra attention to individual health rate proposals coming from WellPoint Inc., Indianapolis (NYSE:WLP); Health Net Inc., Woodland Hills, Calif. (NYSE:HNT); Blue Shield of California, San Francisco; and Aetna Inc., Hartford (NYSE:AET).
Those carriers cover about 90% of the California residents who have individual health coverage, officials say.
An outside actuarial firm, Axene Health Partners L.L.C., Winchester, Calif., reviewed individual health rate filings submitted by a unit of WellPoint and found indications that some increases were significantly higher than state law allows, according to California Insurance Commissioner Steve Poizner.
California does not require prior approval of individual health rate changes, but it does require that insurers spend 70% of individual health premiums collected on medical benefits, officials say.
“By subjecting insurer rate filings to this additional level of scrutiny, California consumers will know that all major insurers are adhering to the state’s requirement that 70% of premiums are spent on medical benefits,” Poizner says in a statement.
Axene now is reviewing filings by Aetna and California Blue Shiel, officials say.
Aetna has been working with the California department on individual health rates and filed a notice in March stating that it would increase California individual rates by an average of 18.7%, according to Aetna spokesman Cynthia Michener.
The increase would raise the average individual insured’s monthly premium payments by about $50, Michener says.