In California, Aetna raises health insurance rates for small businesses

The Sacramento BeeApril 6, 2012 

SACRAMENTO, Calif. — Despite criticism from California's state insurance commissioner and several statewide consumer groups, Aetna said Thursday it's going ahead with a recent hike in health care premiums for small businesses.

Aetna's new increases, which average 8 percent annually and took effect April 1, were deemed "unreasonable" this week by state Department of Insurance Commissioner David Jones.

He said it's the first time a California health insurer has proceeded with an increase after it's been labeled as excessive by the department.

"It's disappointing and frustrating, especially since other health insurers have agreed to refrain from increases," said Jones.

Under legislation that went into effect in January 2011, the state insurance commissioner can assess whether health insurance rate hikes are justified, but does not have the authority to halt the increases.

According to the Insurance Department's analysis, Aetna made "projections about medical cost increases that were not supported by Aetna's actual claims experience."

In an emailed response, Aetna spokeswoman Anjie Coplin said, "While rate increases are never easy, our rates are based on actuarially sound data and reasonable projection of future cost."

Coplin said about 16,000 small-business employees and dependents will see the rate increase via their renewals in April, May and June.

One consumer group said the health premium increases are another blow to California's struggling small businesses. "If politicos in Sacramento and Washington are serious about creating quality jobs in America, they should embrace efforts to rein in unsustainable health costs for small-business owners and their employees," said Austin Price of the California Public Interest Research Group in a statement.

Another group, Santa Monica-based Consumer Watchdog, is trying to qualify a ballot measure that would give authority to the insurance commissioner to approve or reject health insurance rates. Currently, the commissioner has that authority for auto, homeowners, property and casualty insurance rates.

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