A newer, smaller rate hike request submitted this week by WellPoint for individual plans in California under its Anthem Blue Cross umbrella, as well as a revised rate hike request from Aetna, were both met with pessimism and skepticism by California Sen. Dianne Feinstein (D) and state insurance commissioner Steve Poizner, the latter of whom promised to review the filings with "a fine tooth comb," a Reuters report reveals.
Anthem Blue Cross filed for an average increase of 14 percent for individual insurance plans, with a maximum 20 percent increase that would affect 700,000 policyholders, according to the Los Angeles Times. The insurer previously requested rate hikes averaging 25 percent (that could have climbed as high as 39 percent for some policyholders), but withdrew that request in late April after an independent actuarial hired by Poizner determined that the filing contained multiple and substantial errors.
Aetna's request, like its previously pulled filing, asked for rate hikes averaging 19 percent, which will affect around 65,000 policyholders. Despite mathematical errors found in its filing, as well, the insurer determined those errors had no effect on overall calculations.
"I think the fact that two of California's four major health insurance companies were caught using flawed formulas to calculate rate is something that raises serious questions," Feinstein wrote in a statement running on the Huffington Post's website. "How could two separate multi-billion dollar companies make the same kind of mistakes--miscalculations that nearly resulted in major increases in the cost of health insurance premiums? How many more errors will be found ... if independent investigations were conducted on a wider sample of health insurance companies?"
Brad Fluegel, chief strategy officer for WellPoint, told the Times that even with the rate increases, the insurance company would lose more than $100 million this year.
"The rates do not cover our costs and are not going to be sustainable over the long term, but it made sense to move ahead," Fluegel said. "Given the environment, it was in the best interest of everyone to get this behind us and move forward."
To learn more:
- read this Reuters article
- here's the Los Angeles Times piece
- check out Feinstein's statement, courtesy of the Huffington Post
- read this California Department of Insurance press release