Here’s a rundown on the changes of keenest interest to insurance advisors...
Three California insurers agreed to delay any rate increases for two months at the request of Insurance Commissioner Dave Jones.
Aetna, Anthem Blue Cross and PacifiCare pledged to defer premium increases filed with the California Department of Insurance by 60 days beyond their anticipated effective dates.
Anthem agreed to the hold in a spirit of cooperation with the new commissioner, Anthem spokeswoman Peggy Hinz said in a statement. "We believe the challenges we both face in implementing state and federal health care reform will create a common focus that will benefit all Californians," she said.
The pause will allow the department time to adequately review recent rate filings, Jones said in a statement. The commissioner also expressed disappointment that Blue Shield of California has not agreed to the same terms; Blue Shield has said it will subject its rates to an independent actuarial review, as required, and refund policyholders if an actuary finds its rates aren't sound (BestWire, Jan. 27, 2011).
"Blue Shield policyholders will not have the benefit of this additional review period to ensure compliance with the law, but I will do what is within my power to determine whether Blue Shield's proposed rates are in compliance with the law and to enforce that law," Jones said.
Blue Shield of California recently announced plans to raise premiums on some individual and family health insurance policies by as much as 59%. The average increase is about 30% and roughly 193,000 policyholders would be affected (BestWire, Jan. 18, 2010).
Anthem is a unit of WellPoint Inc. (NYSE: WLP). PacifiCare is a unit of division of UnitedHealth Group (NYSE: UNH).
A new state law requires the insurance commissioner to review the reasonableness of health insurance rate increases but the commissioner is not authorized to reject unreasonable rate increases.
Last summer, under then-Commissioner Steve Poizner, the insurance department said it would require requests for premium rate increases by top health insurers in the individual market to undergo an additional review by outside actuaries.
In late January, the California Office of Administrative Law approved an emergency regulation granting Jones the state authority to enforce the 80% medical loss ratio threshold for the individual health insurance market set by the federal Affordable Care Act (BestWire, Jan. 27, 2011). Under the Affordable Care Act, effective Jan. 1 insurance companies must disclose how they spend premium dollars. By 2012, large group health plans will also be required to issue refunds to policyholders if they spend less than 80% of premium income on actual medical care and activities to improve the quality of care; the level is 85% for large group plans.
(By Sean P. Carr, Washington Bureau Manager: firstname.lastname@example.org)