The California Department of Insurance announced that itwill be reviewing plans for rate increases for individual health insurancepolicies for its four largest individual policy providers: Anthem Blue Cross, Aetna, Health Net, and Blue Shield of California. Thereview will only occur for policies that are purchased by individuals, not byemployers or Medicare.
Currently, Californialaw requires 70 percent of all health insurance premiums paid to be spent onmedical benefits. Anthem announced plans in February to raise rates on itsindividual policy holders by up to 39 percent.
However, an analysis found errors in Anthem’s proposal whichmeant that after the raise in premiums, Anthem would be spending less than 70percent of premiums on benefits. Anthem withdrew the proposal and will resubmitits rate hikes. Blue Shield wants rate hikes of 18 percent, and Aetna wants a 19 percent raise in rates.
The Department of Insurance appointed an independent actuaryto review the companies to make sure they are following state insurance lawswhen raising rates. Aetna and Blue Shield arebeing reviewed now. Anthem Blue Cross and Health Net will face reviews in thefuture.