Math is hard…

Another victory! Aetna has withdrawn their proposed rate hikes averaging 19% for patients who pay premiums in the individual health insurance market. Once again, “significant mathematical errors” were found.

This started back when the double-digit rate hikes of Anthem Blue Cross of California got attention during the health reform debate. After basically rubber-stamping them as regulators have customarily done, Insurance Commissioner Steve Poizner then ordered an independent review of the rates, but given the very limited authority given California regulators, few thought it would make a difference. But in fact, the independent actuary found math errors and other problems, leading Anthem Blue Cross, California’s biggest insurer, to withdraw the proposed rate increase.

Given that it was apparent that the insurers were arrogant enough not to check their work, Health Access asked the Department of Insurance to conduct similar reviews for all insurance rate filings, by Anthem Blue Cross and also the other insurers. Poizner announced just such a review recently, and that led to Aetna to acknowledge the math problems in their filings, and to pull back the rate hike. Reviews are also pending for HealthNet and Blue Shield.

This shows the need for greater scrutiny of all rate filings, and for expansion of rate review and rate regulation. California is eligible for federal funds to conduct more aggresive reviews of rate filings. Earlier this week, the Senate Health Committee passed AB2578(Jones and Feuer) to give California regulators broader ability to approve and reject unjustified rate hikes.

These math problems only add up to one conclusion: we need greater oversight over the insurance industry, and we need it now.

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

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