State Officials Inspecting Proposed Small Business Insurance Rate Hikes
State officials are scrutinizing three health insurers' proposed premium rate hikes for small businesses next month, the Los Angeles Times reports.
Details of Proposed Hikes
The rate hikes were proposed by:
- Aetna, which seeks an average increase of 10% and some increases as high as 24% for certain businesses;
- Anthem Blue Cross, which seeks a 13% increase; and
- Blue Shield of California, which seeks increases up to 6% for certain businesses.
Questioning the Rate Hikes
Byron Tucker -- a spokesperson for the state Department of Insurance -- said the agency is talking with the insurers about whether the proposed hikes are too high.
In addition, the California Department of Managed Health Care said it is reviewing other proposed premium increases that are scheduled to take effect in July or August. Â
The insurers said in filings to regulators that the proposed rate hikes are necessary because of escalating medical expenses, including rising costs for hospital care and prescription drugs.
The companies also said expenses are slightly higher because of new government-mandated benefits for maternity and autism care.
Potential Aid From Health Reform Law
Liz Parker -- a co-owner of the Tulsa Rib Company -- said that she and other small business owners hope that the California Health Benefit Exchange will help them secure lower health insurance rates (Terhune, Los Angeles Times, 6/12).
Under the federal health reform law, states by January 2014 must create state-based health insurance exchanges to provide coverage options for individuals and small businesses (California Healthline, 6/8).
Ballot Measure Seeks To Expand Rate Regulation
Although state regulators can question proposed rate increases, they do not have the authority to reject rate hikes (Los Angeles Times, 6/12).
Last month, California Insurance Commissioner Dave Jones (D) and Consumer Watchdog officials submitted to state officials 800,000 voter signatures to qualify for the November ballot a measure that would give DOI the authority to approve or reject rate increases that the agency deems excessive. At least 504,760 valid signatures are necessary to qualify the measure for the ballot.
A coalition of hospitals, physicians and other stakeholders oppose the measure (California Healthline, 5/21).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.