California Health Insurers Reduce Rate Increases to Tune of $48 Million

“We take our commitment to our small business customers seriously and are making every effort to maintain an affordable array of products that provide access to quality health services in a difficult economic environment, our Small Group customers have health plan options with varying levels of benefits and corresponding premiums. We work to meet their demands and needs as they evolve,” Aetna stated.

Under state law, the state Department of Insurance reviews the rates in order to make a determination about whether the proposed rate is unreasonable, but lacks the authority to reject excessive rate increases. Jones has spoken out against his lack of authority here before, and is trying to change this with Assembly Bill 52, which would give this authority, which the commissioner’s office already has for auto, home, property and casualty insurance to the Department of Insurance. Small group policies are available to small employers with 2-50 employees.  

Insurers have a history of reducing average increases in California, or delaying them, under Jones. In 2011, Anthem Blue Cross agreed to reduce the average increase to 9.1%, from 9.8%, and to impose the increase July 1, rather than April 1.

Jones insisted early on that large carriers submit proposed individual rate increases to an extra layer of state review, and that they wait at least 60 days after a rate increase takes effect to ask for a new rate increase.

A recent state law, created by California Senate Bill 1163, required a health plan or health insurer to provide an actuarial analysis explaining the need for an increase.

“Lowering health insurance costs for small employers has been and will continue to be a top priority for me,” said Insurance Commissioner Dave Jones. “I appreciate Anthem Blue Cross, Blue Shield and Aetna’s response to my request that they lower their proposed July 1st rate increases on small employers.”