By Dave Jones, California Insurance Commissioner
July 30, 2013 (San Diego) – In case you missed it, last week I recommended that Anthem Blue Cross and Blue Cross of California should be excluded from California's Small Business Health Benefits Exchange.
On July 1, Anthem will increase rates on small employers 7.2%, the third unreasonable rate increase imposed on small employers this year alone. The 12-month cumulative increase for these Anthem customers is 17.6%; had Anthem reduced its rate increase to a reasonable level as I requested, policyholders would have seen $37 million in savings.
Despite my request that they refrain from these three rate increases, Anthem went ahead and imposed the unreasonable increases at a time when small employers are struggling to climb out of the worst recession since the Great Depression. The only potential consequence under the Affordable Care Act is to exclude Anthem and Blue Cross from the Small Business Health Benefits Exchange, and that's exactly what I am recommending.
The Affordable Care Act includes a provision authorizing Insurance Commissioners to determine if a health insurer has engaged in pattern of excessive or unjustified rate increases, and if so, to recommend whether the health insurer should be excluded from the Exchange.
After three unreasonable rate increases in less than seven months, I have determined that Anthem Blue Cross has engaged in a pattern of excessive or unjustified rate increases. And I recommended that Covered California - our state's Health Benefits Exchange - exclude both Anthem Blue Cross and its sister company Blue Cross of California from the Small Business Health Benefits Exchange.
Unfortunately, there is nothing in the Affordable Care Act or state law that prevents health insurers from imposing unreasonable rate increases on individuals, families or businesses. Until the law is changed to give the Insurance Commissioner the authority to reject excessive rate increases, we will continue to see unreasonable health insurance rate increases.
For more information about my recommendation, which we believe is the first time an insurance commissioner has exercised this provision of the Affordable Care Act, click here for the LA Times article or here for the California Department of Insurance press release.
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