News: 2010 Press Release

In order to ensure that health insurers are charging accurate rates to their individual customers, Commissioner Poizner announced today that any rate change filings by top health insurers will undergo an additional level of actuarial analysis as part of the California Department of Insurance's regulatory review.

"My job as Insurance Commissioner is to ensure that consumers get treated fairly and charged accurate prices," said Commissioner Poizner. "When we retained an outside actuary to review Anthem Blue Cross' rate filing, we found that Anthem had attempted to increase its rates by 50 percent more than state law allows. By subjecting insurer rate filings to this additional level of scrutiny, California consumers will know that all major insurers are adhering to the state's requirement that 70 percent of premiums are spent on medical benefits."

The top health insurers in the individual market are Anthem Blue Cross, Aetna, Health Net, and Blue Shield and cover approximately 90% of the individual health insurance market.

When these insurers file new rates, their filings will be reviewed by outside actuaries. This review is similar to the review of Anthem Blue Cross conducted by Axene Health Partners (AHP), which uncovered significant errors. Currently, AHP is reviewing filings by Aetna and Blue Shield.

Unlike auto and homeowners insurance rates, health insurance rates do not require prior approval of the Department of Insurance. However, state law requires that 70 cents of every dollar collected in health insurance premiums are spent on medical benefits. This additional actuarial review will scrutinize each filing to make sure they comply with the 70 percent threshold.

Commissioner Poizner, as leader of the state's largest consumer protection agency, has continually fought for consumers. When Anthem Blue Cross filed for a health insurance rate increase of up to 39 percent, Commissioner Poizner took the unprecedented step of sending the rate filing to an outside actuary for review. This analysis found extensive mathematical errors that led Anthem Blue Cross to withdraw its rate filing.