Yesterday, Health Access California urged state regulators in letters this week to undertake a broader investigation on planned health insurance rate hikes, as reported today by Duke Helfand in the Los Angeles Times. Last week, Anthem Blue Cross of California withdrew applications to increase rates by up to 39%, after an independent analysis of their rate filings showed several problems, including double-counting and arithmatic errors.
Oversight matters. Anthem Blue Cross’ admission of error and 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 provides very limited authority, and it was still able to find basic problems in arithmetic and double-counting. This shows why more extensive oversight is needed, which is why we are calling on regulators to take this next step.
Health Access is calling for a similar independent analysis of rate filings by *all* insurers in both the individual and small group market. The only full evaluation that was done was of Anthem Blue Cross in the individual market. If regulators found significant problems in the one rate filing they looked at, that’s reason to look harder at all of them. Anthem Blue Cross didn’t even bother to check its math, and there’s no reason to think others are different.
Copies of the letters to the California Department of Insurance, and the California Department of Managed Health Care are available on the Health Access website, at: http://www.health-access.org/item.asp?id=31
The letter also urges regulators to take advantage of resources in the federal health reform law to do more vigorous reviews of insurance rates. In addition, Health Access continues to seek more aggressive rate approval authority. We need regulators to take advantage of the new resources to review rate under the federal health reform that passed, and to push for additional rate review and approval authority, as is being considered at both the state and federal levels.
Also in response to the Anthem withdrawal of its rate filings due to errors, U.S. HHS Secretary Kathleen Sebelius is also calling on other states to review the rates submitted by Wellpoint, Anthem’s parent company.
Federal health reform 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.