Aetna rates go up for 65,000 policyholders in California

The premium increase follows an actuarial review put into place after a controversial rate hike request by a WellPoint plan.

By Emily Berry — Posted Oct. 7, 2010

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The 65,000 people in California who have individual health insurance policies through Aetna saw their rates go up by an average of 18.7% as of Oct. 1, following actuarial review of the company's rate increase filing.

California Insurance Commissioner Steve Poizner made the state's largest health plans pay for independent reviews to ensure the companies' new rates still would result in a predicted 70% medical-loss ratio. That means the companies would expect to spend at least 70 cents of every premium dollar on medical care, as required by state law.

Aetna revised its filing this year after discovering a mathematical error in the original one. Dept. of Insurance spokesman Ioannis Kazanis said the rate increase filing was found to meet the 70% standard, but that the department does not support the increase. California regulators do not have the authority to accept or reject proposed increases unilaterally.

The actuarial review came after WellPoint-owned Anthem Blue Cross submitted an average 25% individual rate increase in early 2010, which drew the attention of the Obama administration and is widely credited with providing a major push toward final passage of health system reform in March.

The insurance department in May said mathematical errors in determining medical expenses were responsible for the large proposed increase. The Dept. of Health and Human Services then encouraged other states to review the supporting information Anthem Blue Cross submitted for their rate increases.

Anthem Blue Cross resubmitted an average rate of 13.5% for its 700,000 individual members in California, which the state approved.

State law requires an insurer-paid, independent actuarial review to accompany every health plan rate increase filing.

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