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News: 2011 Press Release
For Release: February 1, 2011
Media Calls Only: 916-492-3566
Commissioner Jones Announces That Blue Shield Has Agreed To 60 Day Delay For Rate Increases
Blue Shield has agreed to Commissioner Dave Jones' request that they delay the previously announced March 1, 2011 rate hikes.
On his third day in office, Commissioner Jones requested the 60 day delay in order to have adequate time to review Blue Shield's rate filing that would result in some policyholders receiving rate increases of up to 59% over a six month time period. He followed that action by requesting that Anthem Blue Cross, Aetna and PacifiCare also give him an additional 60 days beyond their anticipated implementation dates for their pending rate filings. Last week, Commissioner Jones announced that Anthem Blue Cross, Aetna and PacifiCare agreed to his request. Now, Commissioner Jones is pleased to announce that Blue Shield will also delay their proposed March 1st rate increase by 60 days.
Under a new state law (SB 1163) that went into effect on January 1, 2011, health insurers are required to provide detailed information regarding premium increases and to submit a certification from an outside actuary to the Department of Insurance. The department 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 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. The Insurance Commissioner does not, however, have the authority to reject excessive premium increases.
"Hundreds of Blue Shield policyholders have contacted my office to let us know how worried they are about the proposed rate hikes of up to 59%", explained Commissioner Jones. "I let Blue Shield and other insurers know that I needed adequate time to review their proposed rate filings to ensure that the information submitted is complete, accurate and in compliance with the law. I am pleased that Blue Shield is now joining Aetna, Anthem Blue Cross and PacifiCare in agreeing to my request for an additional 60 days to review their rate filings. Before Blue Shield policyholders face additional rate hikes, we need time to review the rate filings 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 increases are unreasonable. The Insurance Commissioner does not have the legal authority to reject rate increases because they are excessive or unreasonable. As a state legislator, I authored legislation to give the Insurance Commissioner the authority to reject excessive rate hikes and I am asking the Legislature to pass AB 52 this year to give me this authority," Commissioner Jones continued.
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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