Aetna raises rates in California despite opposition from state

Posted April 23, 2012

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Effective April 1, Aetna raised premiums for 16,000 of its small-business customers in California by an average of 1.8%, an increase the state Dept. of Insurance had declared unreasonable. Combined with other increases during the last three quarters, the most recent hike means premiums have gone up an average of 8% during the last year and more than 30% cumulatively over the last two years for those small-business customers.

The state’s actuaries asserted that Aetna was overestimating its medical expenses for the next year and deemed the increase unreasonable. That pronouncement, however, is the limit of the department’s authority, because the California insurance commissioner cannot block rate increases.

Aetna spokeswoman Cynthia Michener said “rate increases are never easy” and defended Aetna’s cost projections. She said the plan’s projected medical-loss ratio for the customers in question is 86.7%, well above the 80% minimum set under the Patient Protection and Affordable Care Act.

Note: This item originally appeared at

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