An independent actuary says individual health insurance rate increases recently announced by Blue Shield of California appeared to be based on reasonable assumptions and straightforward pricing methods.
California Blue Shield, San Francisco, asked for the independent rate reviews by David Axene of Axene Health Partners L.L.C., Winchester, Calif., in January, after California Department of Insurance officials asked large health insurers in the state to submit rate increases to independent actuarial reviews.
California Blue Shield said it would make refunds to policyholders if Axene – who has had contracts to review rate filings for the California department — found that its rates were unsound.
“It is our opinion that the [California Blue Shield] proposed rates are reasonable, not excessive, and meet the requirements of the California Department of Insurance,” Axene writes in a letter summarizing his findings. “It is our opinion that these rates will generate a small positive margin … when investment income is included and as the new commission schedule comes into full effect.”
Axene says California Blue Shield seems to be using the same