The California Department of Insurance is doing its job. Insurance regulators announced June 16 that the DOI has ordered independent reviews of proposed rake hikes requested by four of the state’s largest insurers of independent health policyholders. Aetna, Anthem Blue Cross, Blue Shield and Health Net will now have their latest rate proposals scrutinized to ensure the carriers comply with state law, reports the Los Angeles Times, “Health Insurers’ Rate Hike Gets State Scrutiny”
The review is also the second time around for Anthem this year. The company’s earlier attempt at a rate increase – as much as 39 percent for some customers – caused so much controversy that the DOI hired an independent actuary to examine the proposed increase. The actuary found that Anthem’s plan not only failed to meet the state requirement that 70 percent of premiums be spent on medical claims (as opposed to administrative costs) but also that the insurer erred in the way it calculated its rates. Anthem apologized — and then promptly proposed another, slightly more modest, rate hike.
Spokespeople for the health insurers all told the Times that they’ve learned from Anthem’s mistakes and that they are confident their rates will pass muster. Several even conducted “mock” reviews before submitting their requests to be particularly diligent, they said.
We applaud the DOI for taking rate increases seriously and not merely rubber-stamping proposals, even and especially when the carriers assure the department they’ve complied with state law. The cost of independent review is entirely justified, and consumers have the reassurance the DOI is working in their best interests.