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Aetna backtracks on California rate request as Feds issue more rules for insurers
What a difference a few days make. On June 17, FierceHealthPayer noted that Aetna Executive Vice President and CFO Joseph Zubretsky, speaking at the Goldman Sachs 31st Annual Global Healthcare Conference, said that rate filings "need to be accurate. They need to be checked and audited, and we are comfortable that we have a process that does that." However, last week the Hartford, Conn.-based health insurer found a mistake in its calculations and, following the path previously tread by WellPoint subsidiary Anthem Blue Cross, withdrew its rate increase application for individual policyholders in California, reports the Wall Street Journal.
Aetna had requested rate hikes averaging 19 percent effective July 1 affecting roughly 65,000 policyholders. However, the company voluntarily withdrew its application after determining that it had incorrectly calculated the annual cost of monthly premiums and incorrectly compounded the increases year over year, according to a spokesman for the state Department of Insurance. "Aetna conducted a third round of internal actuarial reviews on our individual rate filings in California and found a miscalculation not previously detected," said company spokeswoman Cynthia Michener. "This was a simple human error."
As a result of the miscalculations by Aetna and Anthem, the California Department of Insurance will begin posting all new individual-market health insurance filings on its website, notes the Los Angeles Times. "Given that two of the four major health insurers [in California] have provided rate filings containing math errors, I believe an additional level of transparency is warranted," said California Insurance Commissioner Steve Poizner. U.S. Department of Health and Human Services Secretary Kathleen Sebelius applauded California "for its decision to shine more light on skyrocketing insurance rates and demand more accountability after uncovering that a second insurer used faulty math to try to justify exorbitant health insurance premium increases."
The latest rate increase fiasco came as the federal government issued new rules, described by President Obama as a "Patients' Bill of Rights," covering preexisting condition exclusions, lifetime and annual limits, rescissions, and patient protections mandated by the passage of health reform, reports The Hill.
To learn more:
- read this Wall Street Journal article
- read this Huffington Post article
- read this Los Angeles Times article
- read Secretary Sebelius' statement
- read this blog post from The Hill
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Insurance premiums: More double-digit hikes sought in Rhode Island, Michigan and Connecticut
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