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News: 2011 Press Release
For Release: January 27, 2011
Media Calls Only: 916-492-3566
Insurance Commissioner Jones Announces That Health Insurers Will Hold Off On Rate Increases
Insurance Commissioner Dave Jones announced today that Anthem Blue Cross, Aetna, and PacifiCare have agreed to comply with his request to refrain from increasing premiums for 60 days beyond their anticipated effective dates for their recent rate filings with California Department of Insurance (CDI).
Earlier this month, Commissioner Jones made a similar request of Blue Shield after almost 200,000 California policyholders were notified of significant rate increases, with some reaching as high as 59 percent when combined with previous, recent rate increases. Although Blue Shield has not agreed to comply with the 60 day delay, the company has announced they will hire an outside actuary to review its filing and to issue rebates to policyholders if warranted.
"I am pleased that Aetna, Anthem Blue Cross and PacifiCare have agreed to my request that they halt the implementation of their rate increases until the Department of Insurance has adequate time to review their recent rate filings," Commissioner Jones said. "I am very concerned about the impact premium increases will have on policyholders, so I want to ensure that the Department has adequate time to review these rate filings for compliance with the law. Blue Shield policyholders will not have the benefit of this additional review period to ensure compliance with the law, but I will do what is within my power to determine whether Blue Shield's proposed rates are in compliance with the law and to enforce that law," continued Jones.
Under California law, the Insurance Commissioner does not have the authority to reject excessive premium increases; however, by asking these insurers for a delay in the implementation of their rate increases, the Commissioner should have the time necessary to ensure that all proposed increases have been thoroughly reviewed and are in compliance with the law, including the recently enacted SB 1163. SB 1163 requires health plans and insurers to provide detailed information regarding premium increases and to submit a certification from an outside actuary. The Department of Insurance reviews those rate filings and the Insurance Commissioner is required to determine if the proposed rate is "unreasonable" and to post that information on his website. Additionally, on Commissioner Dave Jones' first day in office he issued an Emergency Regulation which gives him the authority to enforce the new federal 80% medical loss ratio in the individual market.
"Although I do not have the authority to prevent excessive rate increases, these rate filings will be reviewed to ensure compliance with the new law that requires that 80 cents of every premium dollar is spent on providing health care and to determine whether the proposed rate increase is unreasonable," Commissioner Jones said. "These rate increases come at a time when many Californians are still struggling to get by in tough economic times, so it is especially important to work to prevent unreasonable rate increases from going into effect," continued Jones.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2012 the California Department of Insurance received more than 160,000 calls from consumers and helped recover over $64 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Out-of-state callers, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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