Insurers’ Proposed Rate Hikes in California Draw Criticisms

Consumer advocates are criticizing insurers’ planned premium rate hikes in California as an attempt to boost profits while the U.S. prepares to implement the Affordable Care Act, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 11/29).

Details of Anthem’s Planned Rate Hikes

Recently, Anthem Blue Cross proposed premium rates hikes for next year that average 18% for more than 630,000 individual policyholders. Some of Anthem’s policyholders could experience premium increases of as much as 25% in February 2013.

Anthem also is seeking a separate rate hike averaging 15% for an additional 100,000 policyholders whose plans are regulated by the state Department of Managed Health Care (California Healthline, 11/28).

Details of Additional Planned Rate Hikes

According to filings with state officials, other insurers that have proposed premium increases include:

Aetna, which has proposed a nearly 19% rate hike for about 69,000 individual policyholders in April 2013;

Kaiser Permanente, which has proposed an 8% rate hike for more than 220,000 policyholders in January 2013; and

UnitedHealth Group, which has proposed a 10% rate hike for about 11,000 policyholders in January 2013.

Criticisms of Planned Rate Hikes

Consumer advocates say that insurers are trying to raise premiums in advance of Jan. 1, 2014, when the ACA will be fully implemented and insurers will not be able to deny coverage to individuals with pre-existing conditions. Jamie Court — president of Consumer Watchdog — said insurers want to boost their premiums going into 2014 to account for uncertainties in the law and to make sure they can make as much money as possible. He said, “This is a pre-emptive strike against the implementation” of the ACA.

Insurers’ Response

Darrel Ng — an Anthem spokesperson — said that the insurers’ rate increases “represent an economic reality faced throughout the entire industry, indicating health care costs continue to escalate faster than the growth of premiums.” Anthem also argued that the lagging economy has caused people to drop their health insurance to save money. As a result, many of those who keep their policies tend to be sicker and use their insurance more, according to Anthem (San Francisco Chronicle, 11/29).

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