Health insurance rate increase draws ire of California regulators

Dave Jones California insurance commissioner insurance industry rates

Dave Jones California health insurance commissionerDave Jones criticizes health insurance company for rate increases

California Insurance Commissioner Dave Jones has strong criticism against some of the state’s health insurance companies this week. The Commissioner, who has long been wrestling with insurers over the cost of health insurance coverage, denounced Anthem Blue Cross for the company’s latest rate increase proposal. Jones calls the rate increase “excessive” and “unreasonable.” In the past, rate increases have been targeted mostly at consumers, but the latest increase from Anthem Blue Cross is aimed at small businesses.

Rate increase targets small businesses

Anthem Blue Cross is planning to raise rates on the health insurance plans offered to small businesses by an average of 5.2%. These higher rates are expected to affect more than 7,000 small business throughout the state. Jones claims that the insurer has raised rates on this coverage by more than 10% over the past year. The Commissioner argues that constant rate increases are putting significant strain on consumers and business alike and that continued rate increases could cause small businesses to stop offering benefits to their employees.

Jones claims higher rates are not necessary

Jones claims that the rate increase is unnecessary because of Anthem Blue Cross’ earnings last year. The insurer suggests that the Commissioner is overstating its earning power, with spokesman Darrel Ng claiming that the company’s returns from the small business sector came in at 1%. Anthem Blue Cross claims that higher rates are necessary to account for the emerging risks that are being seen in the Californian market, as well as the necessity to comply with federal health care reform, which is introducing several new regulation to the health insurance sector that could have costly implications for insurers.

Insurers continue to wrestle with state regulators

Earlier this year, Anthem Blue Cross attempted to raise rates on individual health insurance plans by an average of 18%. A private plea made by Commissioner Jones successfully reduced the rate increase to 14%, but Jones continues to argue that insurers are raising rates at an unacceptable and dangerous pace. Anthem Blue Cross is not the only insurer to invoke the ire of the Commissioner, of course, but Anthem is the latest to introduce rate increases to the state.

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