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Anthem rate hike 'unreasonable,' California regulators say

The California Department of Managed Health Care is calling Anthem Blue Cross's 16 percent rate increase affecting 120,000 individual customers "unreasonable," but said it can't stop the insurer from implementing it, the Los Angeles Times reports.

A DMHC review found Anthem's increases were 3 percent to 4 percent higher than individual plans with similar benefits under the jurisdiction of the Department of Insurance, which is California's other insurance regulator, according to the Associated Press. However, Anthem refused DMHC's request to match the break in insurance rates it's giving to those 600,000 other customers.

"In the spirit of providing maximum transparency to consumers about rate increases, we have little choice but to publicly express our disappointment that Anthem Blue Cross didn't lower the rates as we requested," DMHC said. This is the first time a rate was declared unreasonable by DMHC, the nation's only regulator solely dedicated to HMOs, the AP notes.

In response to DMHC's declaration of disappointment, Anthem officials noted that the department previously said its rate increase was reviewed by an independent actuary that found the increase was not unreasonable or unjustified, the Sacramento Business Journal reports. "We feel that is still an accurate statement and intend to seek an administrative appeal regarding the DMHC's recent statement to the contrary," Anthem said.

"We are disappointed by this public announcement that contradicts the department's action on Anthem's rate filing for those products, and to which Anthem had no opportunity to respond," Anthem spokeswoman Kristin Binns noted.

DMHC spokesperson Lynne Randolph acknowledged that the actuary had deemed Anthem's rates "not unreasonable or unjustified." But things changed, she said, after Anthem granted a break in rates to its 600,000 customers handled by the insurance commissioner's office, the LA Times notes.

To learn more:
- read the Los Angeles Times article
- see the Sacramento Business Journal piece
- check out the Associated Press story

Related Articles:
Anthem still raising rates for some policyholders
Anthem cuts, delays premium rate hikes
Anthem Blue Cross faces class-action lawsuit as rate hike decision looms
Sebelius demands Anthem explain its 'extraordinary' premium hikes

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