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.