California health insurance rates may soon be on the rise for small businesses

Business Insurance policy

Business Insurance

A proposed increase will mean premiums that are over 10 percent higher for smaller firms.

Some California health insurance companies have proposed a rate increase for small business plans which will bring the price up by more than 10 percent and could become effective as soon as July or August.

This proposal has drawn notable criticism from regulators in the state.

Aetna, which has already received the scrutiny of state officials earlier in 2012, is now planning to hike up its premiums by an average of 10 percent, with increases skyrocketing by as much as 24 percent for certain employers. Similarly, Anthem Blue Cross (the largest for-profit insurer in the state) has put a proposal forward for 13 percent increases. Even Blue Shield of California is seeking to hit small employers for an additional 6 percent.

According to a Department of Insurance spokesperson for the state, Byron Tucker, the agency is currently speaking with all three of those insurers in order to determine whether or not the rate increases are justified.

Equally, the California Department of Managed Health Care has also stated that it is looking over other increases in rates which could become effective within the next couple of months.

Regardless of their decisions, though, neither agency actually has the authority to stop the increases.

All those agencies are capable of doing is to examine the proposals and strongly suggest that the companies reconsider the increases and cut them if they will. At the same time, the only consequence that they can put forward is public criticism.

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This already occurred in April, when officials from the state insurance department put forward another objection to rate increases to for small business California health insurance from Aetna, which were as high as 21 percent. Those hikes were labeled “excessive” by the agency, but Aetna went forward with them anyway.

A spokesperson from Aetna, Anjie Coplin, countered by saying that the rate increases for California health insurance plans for small businesses “are based on actuarially sound data and a reasonable projection of future cost.” The insurer also pointed out that some of its small business policyholders will also see rate decreases starting in July.

Other related article(s) and resources:

http://www.latimes.com/business/la-fi-small-business-insurance-20120612,0,4455424.story

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