Insurance Rates Increase for Entertainment Groups

An 82% proposed premium increase for California residents who buy health insurance through groups representing the entertainment industry is not barred by state rules, officials said, USA Today reports.

The increase raises the cost of the most expensive family plan Cigna offers to the groups in California to $3,685 monthly, more than $44,000 annually (Appleby, USA Today, 12/6).

Community rating rules bar insurers from charging small groups premiums more than 10% higher than similar groups. Similar laws do not govern rates for large groups (California Healthline, 11/27).

Department of Managed Health Care spokesperson Denise Schmidt said that the small-group restrictions do not apply to this group and that the increased rates "don't appear to be outside the norm, given the average age of the group, the (generous) benefit structure and the group's claims history."

Cigna spokesperson Gwyn Dilday says the rate increase is necessary because the group's costs are twice the amount of groups with similar member sizes. Dilday said Cigna recently found that the group has been charged incorrectly for the past decade, which has cost Cigna losses during the past few years (USA Today, 12/6).