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California to review health insurance rate hikesPosted On Wed, June 16, 2010
The four largest health insurance companies in California recently submitted proposals to raise their rates, but one insurer's proposal caused a stir among officials.
Insurance Commissioner Steve Poizner said that an attempted rate hike from Anthem Blue Cross was 50 percent higher than state law allows, according to the Associated Press. As a result, rate hikes proposed by that company, as well as those from Aetna, Blue Shield and Health Net, will be reviewed by independent actuaries to find if they are necessary. Aetna and Blue Shield are currently being reviewed, with Anthem Blue Cross and Health Net facing review in the future.
The AP said that California does not require prior approval from the Department of Insurance for rate increases, but does require that 70 cents of every premium dollar be spent on medical benefits for policyholders.
The Los Angeles Times reported that the reviews could slow rate increases for individual policyholders, and already has in some instances. Anthem Blue Cross' rejected proposal forced the company to cancel increases of as much as 39 percent for hundreds of thousands of individuals.
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