Aetna and Blue Shield of California have defied state regulators and will proceed with double-digit rate hikes that were deemed unreasonable.
After the insurers initially proposed to increase their premiums, officials from the California Department of Managed Health Care unsuccessfully tried to negotiate lower rate hikes, reported the Los Angeles Times.
"I am disappointed that after lengthy negotiations, Blue Shield and Aetna were unwilling to bring their proposed health plan increases down to a reasonable level," DMHC Director Brent Barnhart said Wednesday in a statement.
Aetna and Blue Shield both wanted to increase rates by an average of more than 11 percent. After finding those hikes unreasonable, state officials could only get Aetna to agree to an ever-so slight decrease, cutting its small group premium increase from an average of 10.9 percent to 10.6 percent, according to Payers & Providers.
Blue Shield, however, continued with its originally planned rate hike of 11.8 percent, which took effect March 1 and impacted 27,000 members. Spokesman Steve Shivinsky told the Southern California Public Radio that Blue Shield "worked tirelessly with the Department of Insurance to address all of their questions and concerns," but "unfortunately, we could not agree."
But state regulators were able to reach a deal with Anthem Blue Cross, which agreed to reduce its average 15 percent premium increase for 94,000 individual members to 12.5 percent. Anthem also said it would waive completely a separate rate hike for some small employers, amounting to $6 million in savings, the LA Times noted.