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1.5 million Californians face health insurance rate hikes today

Health insurance rates for more than 1.5 million Californians covered by some of the state’s largest health insurers will go up starting today.

The rate increases, which were expected, mostly affect policyholders in plans offered through small businesses.

Depending on the plan and the carrier, hikes will average from 3 percent to more than 17 percent, but some individuals within the plans could see much higher jumps.

An unknown number of Aetna’s small-group customers will take a wallop, with rates soaring 92.5 percent, according to California Department of Insurance data.

The average increases for Aetna small-group customers in the two plans affected are 12.7 percent and 17.4 percent.

“It’s not a surprise, but on Friday, it’s a reality. When the bills come, reality will set in for more than a million Californians,” said Doug Heller, executive director of Consumer Watchdog, who has called for rate regulation. “Small groups aren’t getting relief.”

Health Net of California, Kaiser and Sharp Health Plan also have small-group rate hikes that kick in today.

In March, Anthem Blue Cross, the state’s largest insurer, lowered some increases set for July and delayed others until January 2012, but went forward with small-group rate hikes.

Depending on the plan, rates for Anthem small-group customers will rise an average of 3 percent to 9.5 percent.

Kaiser small-group ratepayers will see increases of up to 12 percent on average. Health Net of California small-group ratepayers will pay as much as 16 percent more on average.

The rate hikes are providing more fodder to lawmakers and consumer advocates who are pushing hard for Assembly Bill 52, legislation that would impose rate regulation on health insurers.

They include state Insurance Commissioner Dave Jones, who has lobbied for the authority to stop health insurance rates increases he finds to be excessive.

“I remain concerned in general that the national average increase is 3.4 percent, yet we see average rate filings considerably in excess of that,” Jones said. “Small businesses are paying these increases, and they’re not sustainable.”

The bitter battle over AB 52, written by Assemblyman Mike Feuer, D-Los Angeles, has pitted consumer advocates, labor and other groups against medical and business organizations, insurers and numerous chambers of commerce.

The bill goes to a Wednesday vote in the Senate Health Committee.

Patrick Johnston, president of California Association of Health Plans, said his industry is committed to maintaining competitive rates, but said the rise in health premiums reflects underlying cost drivers including those related to hospitalization, medications and diagnostic testing.

“We all have a job to reduce costs – it’s a burden to society,” Johnston said.

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Written by lordsinsurancelog

July 1, 2011 at 2:26 pm

Posted in Insurance News