SANTA MONICA, Calif., Oct. 15, 2015 /PRNewswire-USNewswire/ -- For the sixth time this year, California insurance regulators have found an Aetna rate hike to be unreasonable. Such health insurance price-gouging will continue until state regulators have the power to reject unjustified health insurance price spikes, Consumer Watchdog said today.
California Department of Insurance actuaries found Aetna Life Insurance Company's most recent small group health insurance rate increase unreasonable. Aetna is increasing rates for small businesses and their employees by an annual average of 27.4 percent, affecting over 40,000 employees and costing small businesses a projected $5.5 million in excessive rates.
Read the Department of Insurance findings: http://www.consumerwatchdog.org/resources/HAO20150189DispositionalComment.pdf
"As long as we let insurance companies keep doing the same thing over and over again we know what the results will be. Californians will continue to be overcharged until we finally regulate health insurance premiums and can reject excessive, unjustified price spikes," said Carmen Balber, executive director of Consumer Watchdog.
The other troubling trend in health insurance pricing has been to mask cost increases for consumers by keeping premium increases slightly lower by restricting benefits, including narrower networks, costlier medications, and higher deductibles, said Balber.
Unlike 35 other states, California regulators do not have the legal authority to reject excessive health insurance rate increases. A recent national study found that those states with the authority to regulate health insurance rates had lower rate increases as compared to states like California that do not. See the study: http://www.consumerwatchdog.org/resources/PriorApprovalWorksHCFOOctober2015.pdf
Senator Dianne Feinstein and Congressmember Jan Schakowsky introduced legislation in Congress last week to give the Department of Health and Human Services the authority to reject excessive rate hikes in those states, such as California, where regulators do not.
Since 2012, health insurance companies have imposed more than $355 million in rate hikes deemed by the Department of Managed Health Care and the Department of Insurance to be unreasonable.
Last year, insurance companies spent $56 million to defeat Proposition 45, which would have required health insurance companies to open their books and justify rates, and allow state regulators to reject excessive increases.
Auto, home and business insurance rates are already regulated in California. That voter-approved law has saved drivers over $100 billion since it was enacted in 1988, according to the Consumer Federation of America.
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SOURCE Consumer Watchdog