CA Department of Managed Care Saves Consumers Over $13.3 Million in Unjustified Premiums

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By Consumers Union on Wednesday, March 6th, 2013

Consumers Union applauds CA DMHC’s efforts to protect consumers from unreasonable rate increases.  DMHC negotiated with Aetna and Anthem Blue Cross to lower their requested rate increases.  Anthem Blue Cross agreed to lower their requested increase in the individual market from 15% to 12.5% saving consumers $11.5 million. Consumers will reap a savings of $122 a year.  Aetna and Anthem also agreed to lower their requested increase in the small group market saving consumers a combined $1.8 million.

Unfortunately,  Aetna and Blue Shield  are moving forward with increases that DMHC has found to be unreasonable and not supported by the documentation the plans have submitted.  Blue Shield raised premiums 11.8% in the small group market on March 1st, and Aetna will impose an 11.4% increase in the small group market on April 1st.   If the plans do not meet the Medical Loss Ratio standards, policyholders will receive a rebate but not until the summer of 2014.

Consumers Union applauds DMHC’s work in protecting consumers from unreasonable rates.  But clearly if the CA legislature provided the regulator with the authority to reject unreasonable rates,  DMHC could further protect consumers from excessive premiums.  California should follow the lead of Colorado,  New York,  Oregon, Washington and many other states that allow their regulator to deny unreasonable rates and ensure consumers are paying fair premiums.

 

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