California Insurance Chief Criticizes Anthem Rate Hike

January 10, 2013

California Insurance Commissioner Dave Jones called Anthem Blue Cross’ proposed rate hike for some of its small-group members is unreasonable, but the insurer says the increase reflects the rising cost of health care.

Jones said that, unlike insurance regulators in many other states, he has no authority to stop the rate increases, which will take effect this month. Anthem’s increase will average 10.6 percent a year, and the two-year increase could be as high as 19.4 percent for some customers, he said.

“My authority is limited to reviewing the rates that are filed. The health insurers can set whatever rates they want – and they do exactly that,” Jones said at a news conference on Tuesday.

Anthem spokesman Darrel Ng disputed Jones’ figures, saying the annual increase is closer to 7.5 percent when adjusting for benefit changes. The rate hikes are comparable to those sought by the company’s competitors, he said.

“The reality is that cost increases are not unique to Anthem Blue Cross, but reflect the realities of the health care market in general,” Ng said.

The rate hike initially will affect 52,000 of the 250,000 people in California who participate in Anthem’s insurance policies for small businesses.

Colleen King, who runs an independent insurance agency in Northridge and serves on the board of the California Small Business Association, said health care costs have and will continue to rise.

“There’s no question rates are going up and it’s getting tougher,” King said. “A large part of the reason for that is the economy has not rebounded quite the way everybody would like, so the healthy people in individual plans are dropping their plans, and because small group rates keep going up, a lot of businesses have to drop their plans.”

She said the federal health care reform law could help control some of the increases because insurers will have to spend at least 80 percent of premiums on medical benefits or refund the difference to customers.

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Latest Comments

  • January 10, 2013 at 4:46 pm
    Reality Check says:
    Hey Davey, know need for you to regulate private industry the market does that just fine. Why don't you ask CalPers to invest in health insurance companies or just give the mo... read more
  • January 10, 2013 at 3:59 pm
    Doug Spencer says:
    Blaming CA Anthem for structural problems from Government mandates, excessive high end prescription drug therapy , excessive defensive medical tests and obtuse legal settlemen... read more
  • January 10, 2013 at 1:54 pm
    Lou Landini says:
    I disagree with Ms Kings assertion that Affordability Care will mitigate price increases. Sure, our commissions will surely be impacted, however all the taxes in the Act will... read more
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