Anthem Blue Cross Shamelessly Advances Unreasonable Rate Hike…

Californians and consumers should be outraged today by Anthem Blue Cross’ decision to impose an unfair rate increase on 120,000 Californians, even after its regulator, the California Department of Managed Health Care (DMHC), declared the rate hike “unreasonable” under a new law today.

Anthem Blue Cross is shameless and irresponsible in continuing to raise health insurance premiums, even when that rate hike has been officially declared as unreasonable by its regulator. This rate hike is Exhibit A on why the California legislature needs to pass the pending rate regulation bill, AB52, to explicitly allow state regulators the opportunity to deny unjustified and unreasonable rates.

The DMHC’s declaration is the first time a regulator declared a rate hike “unreasonable” under a new California “rate review” law passed last year, SB1163(Leno), which was sponsored by Health Access California. The new rate review law, effective on Janaury 1, 2011, requires insurers to provide public notice of rate hike and to publicly justify their rate increases to their regulator.

Partially from the new federal health law, this new transparency and oversight has been a tool that Insurance Commissioner Jones has successful used to get insurers to reduce their rate increases. But when an insurer is shameless, then the regulator needs not just a magnifying glass but a hammer in his toolbox.

The current law does not give regulators explicit ability to approve or deny rates. Under current law, regulators can publicly declare rates to be unreasonable. And in 2014 and beyond under the new federal health law, regulators can advise the new Health Insurance Exchange on whether “particular health insurance issuers should be excluded from participation in the Exchange based on a pattern or practice of excessive or unjustified premium increases.”

The pending rate regulation law, AB52(Feuer), would take the next step, and provide authority to the Department of Managed Health Care and the Department of Insurance to approve or deny health insurance rate increases. AB52, strongly supported by consumer groups including Health Access California but opposed by health insurers and other parts of the industry, passed the Assembly Health Committee this past Tuesday; the bill now heads to the Assembly Appropriations Committee and likely to a floor vote in the California Assembly at the end of May/first week in June.

Health Access California promotes quality, affordable health care for all Californians.
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