Anthem Proceeds With Premium Hikes Deemed ‘Unreasonable’ by State
For the first time, the California Department of Managed Health Care has deemed a health insurance rate hike to be "unreasonable," but officials did not have the authority to stop an increase for Anthem Blue Cross policyholders from taking effect, the Los Angeles Times reports (Helfand, Los Angeles Times, 4/30).
The rate hike, which took effect Sunday, affects 120,000 Anthem Blue Cross members with individual policies. The increases range from 14.4% to 16.7%.
Rate Hike Details
On April 7, DMHC requested that Anthem explain why it was moving ahead with a planned May 1 increase for individual PPO policies overseen by DMHC when planned rate increases for similar policies handled by the state Department of Insurance were scaled back (Robertson, Sacramento Business Journal, 4/29). Rate increasesÂ for individual policies filed with DMHC are 3% to 4% higher than those ofÂ similar plans regulated by the insurance department, according to a DMHC review (Mohajer, AP/San Jose Mercury News, 4/29).
Anthem, StateÂ Response
Anthem said the difference in rate hikes reflects different types of benefits, policies and customer costs under the different state regulators.
The health plan also said DMHC appeared to support the increases earlier this year after an independent actuary concluded that the planned rate increases were "not unreasonable or unjustified."
Lynne Randolph, a spokesperson for DMHC, said the actuaryÂ did determine that Anthem's rates were "not unreasonable or unjustified." However, she said that the department adjusted its position when the insurer reduced planned increases to about 600,000 policyholders with plans under the insurance department (Los Angeles Times, 4/30).
Legislation To Control Rate Hikes
State lawmakers are considering legislation (AB 52) that would grant the insurance commissioner broader power to regulate rate hikes. Janice Rocco, deputy commissioner of the insurance department, said a hearing in the Assembly appropriations committee is expected on the bill in May (AP/San Jose Mercury News, 4/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.