Just as the California Health Benefit Exchange is gearing up for the January 2014 start date, the California insurance commissioner is recommending that it exclude Anthem Blue Cross and also Blue Cross of California from participating in a crucial health marketplace exchange.
State Insurance Commissioner Dave Jones announced late last week he is recommending the marketplace or exchange, called Covered California, bar Anthem Blue Cross Life and Health Insurance Co. (Anthem) and Anthem Blue Cross of California from participating in the Small Business Health Options Program Exchange, which is set to begin enrollment of new health insurance coverage in October.
This stinging recommendation comes after California Insurance Department actuaries determined that Anthem’s July 1, 2013, 7.2 percent average quarterly rate increase on small employers was unreasonable. This is the third Anthem small employer rate increase the California Department of Insurance (CDI) has found to be unreasonable in 2013.
However, it also points to continued negotiations and politics in the state — in contrast to his comments on Anthem. Jones said in February that he “appreciate[s]” Anthem’s willingness to work with the CDI on health insurance rates when Anthem agreed to lower Feb. 1 rate increase for individual and family health insurance products.
The 12-month cumulative increase for these Anthem customers is 17.6 percent. Had Anthem reduced its rate increase to a reasonable level, it would have resulted in $37 million savings for policyholders over a 12-month period.
“Anthem has engaged in a pattern of excessive and unjustifiable rate increases for its small employer customers and therefore they should not be permitted to participate in California’s small employer health Exchange,” Jones stated June 13.
At the same time, Aetna announced today it is leaving the individual market in California.
A section the Patient Protection and Affordable Care Act (PPACA) requires state insurance commissioners to make recommendations to the exchange about whether particular health insurers should be excluded based on a pattern or practice of excessive or unjustified premium increases.