After serious errors led health insurer Anthem Blue Cross to cancel a massive increase in health insurance premiums last week, consumer advocates are calling for a review of pending rate hikes by other big insurers in California.
A prominent healthcare advocacy group urged the state’s two insurance regulators Tuesday to seek independent assessments of all increases in premiums for individual policyholders and those who get insurance through small employers.
The request by Health Access California follows Anthem’s decision last week to withdraw rate hikes of as much as 39% for many of its 800,000 individual policyholders. The move came after a consultant to state regulators found errors in the way Anthem justified its higher charges.
Now, activists want the same kind of state review of other insurers to determine whether any impending increases contain similar flaws.
Neither insurers nor state regulators would say whether any increases were under review or planned. But several consumers said they were notified recently by Blue Shield of California and other insurers that their premiums would increase as their policies came up for renewal in the coming months.
“We fear the errors in the Anthem Blue Cross filing are not an aberration but may be the norm,” said Anthony Wright, executive director of Health Access California, a Sacramento organization that represents several dozen consumer groups.
“If the insurers are not even checking the math of what they are submitting to regulators, who knows what’s in these filings and what consumers are being charged that may not be justified?”
The group wants rate increases scrutinized when they affect any of the more than 5 million Californians who have individual insurance policies or coverage purchased as part of a small employer group.
Two state agencies regulate insurers and review filings for rate increases. Neither has authority to block the hikes unless insurers fail to meet minimum standards for healthcare spending.
The Department of Insurance said its staff already evaluates filings to determine whether further scrutiny is necessary. That’s what happened in the Anthem case as regulators ordered the outside review after concluding that there were problems with the company’s rate application, said spokesman Darrel Ng, without elaborating.
“Should our internal actuaries find indications that pending or future rate filings require a secondary review, one will be completed,” Ng said.
It was unclear what action, if any, would be taken by the Department of Managed Health Care, which regulates California’s vast network of health maintenance organizations.
An insurance industry group pledged to cooperate with additional scrutiny.
“Clearly health plans and insurers are going to comply with any requirements by our regulators,” said Charles Bacchi, executive vice president of the California Assn. of Health Plans. “We would caution that it’s a slippery slope to be talking about rate regulation … because it does nothing to address rising healthcare costs.”
A Blue Shield spokesman said the San Francisco-based company would comply with regulators’ wishes.
“We’re happy to do whatever the commissioner thinks is appropriate,” spokesman Aron Ezra said.
Lawmakers who are pressing for more stringent rules said the stepped-up scrutiny wouldn’t help unless regulators had the authority to reject unreasonable rate increases.
“Even with an actuarial analysis, we still have a huge gap in our ability to regulate health insurers and health plans,” said Assemblyman Dave Jones, (D-Sacramento), who is pushing a bill that would require insurers to get approval of rate increases. “That gap is the absence of the authority to regulate rates.”