Anthem Blue Cross withdraws rate hikes, for now…

California consumers got some relief today. Insurance Commissioner Steve Poizner announced that Anthem Blue Cross of California has withdrawn their rate filings, after a review of an independent actuary has revealed various problems, including arithmetic errors and double-counting.

The rate hikes of up to 39% were controversial, the subject of a white-hot presidential spotlight during the health reform debate.

It’s great that California ratepayers got a reprieve from outrageous rate hikes by Anthem Blue Cross of California.

But more than rate relief, this withdrawal of the rate hike proposals show why we need regulators to have active oversight over the insurance industry. This review was done under existing law, which provided very limited authority, and it was still able to find basic problems in arithmetic and double-counting.

Oversight and regulation matter. This shows why more extensive oversight is needed, some of which is in the federal health reform that passed, and additional rate review proposals that are pending at both the state and federal levels.

Federal health reform (and pending state implementation) would create health insurance exchanges, where people buying coverage as individuals could join and benefit from group purchasing to negotiate for better prices and value. There are also pending proposals at both the state and federal levels to have rate review and approval authority, especially in the period before 2014 when the exchange come into full effect.
* At the federal level, California Senator Feinstein has a proposal to regulate rates at the federal level, especially for states that don’t have a rate review process.
* California is one of those states that does not have rate review, but there are pending bills. Assemblyman Dave Jones has a rate approval bill, AB2578. State Senator Mark Leno has a bill for insurers to disclose their rate methodology, SB1163.

We need these continued reforms, so when Anthem Blue Cross resubmits rate hike proposals, there’s a process to properly review them.

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

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