Jones: UnitedHealth’s 8% Hike for Small Firms Is ‘Unreasonable’
On Wednesday, California Insurance Commissioner Dave Jones (D) called UnitedHealth Group's rate hike for 5,000 small businesses "unreasonable," the Los Angeles Times reports.
California regulators can investigate rate increases but do not have the authority to reject them (Terhune, Los Angeles Times, 5/1).
Rate Hike Details
The rate hike -- which took effect Wednesday -- raises premiums in the next year for small businesses by an average of 7.7%.
The increase affects about 12,000 employees and their dependents this quarter and ultimately will affect more than 45,000 employees when policies are renewed later in the year.
DOI estimated that the rate hike will cost California small businesses $12.5 million over time.
Actuaries from DOI said UnitedHealth was not able to provide substantive evidence to support the premium increase.
In a statement, Jones said, "At a time when small businesses are struggling to survive, [UnitedHealth's] rate increase is just one more unwarranted economic burden on California's small business owners and their employees."
He said that such rate hikes "are simply unsustainable, but rates will continue to rise absent the legal authority to reject them" (DOI release, 5/1). Jones and consumer groups support a November 2014 ballot initiative that would let state officials reject unreasonable rate hikes.
Response From UnitedHealth
UnitedHealth -- which is based in Minnetonka, Minn. -- said that its average annual increase for small business policyholders is less than 2% and that it was "disheartened" by Jones' comments.
According to a company spokesperson, the rate hike "is among the lowest requested increases of any health plan in California" (Los Angeles Times, 5/1).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.