This article is informative, but don’t get excited with the initial number.
Nearly 151,000 of Anthem Blue Cross’ individual policyholders will see their rates rise by as much as 26% on May 1, despite the insurer’s recent announcement about plans to scale back planned rate hikes for 600,000 policyholders, the Los Angeles Times reports (Los Angeles Times, 4/8).
Last month, Anthem announced that it would reduce its planned rate increases from 16.4% to 9.1% and delay the date when the rate hike takes effect from April 1 to July 1.
The insurer also postponed scheduled increases to co-payments and deductibles from April 1 to Jan. 1, 2012, in compliance with a request by state Insurance Commissioner Dave Jones (D) (California Healthline, 3/22).
The changes will affect about 600,000 Californians with health insurance policies that fall under the jurisdiction of the state Department of Insurance.
Differences in Jurisdiction
However, Anthem’s rate hike reductions will not affect the 150,983 policyholders who have plans overseen by the Department of Managed Health Care. Such policyholders will see their rates rise by an average of 16% on May 1. They also could face hikes in copays and deductibles (Los Angeles Times, 4/8).
DMHC typically oversees HMOs, but also regulates some PPO plans. All of the Anthem policies involved in this case are PPO’s.
According to the Times, neither agency could fully explain why some PPOs are regulated by DOI and others are regulated by DMHC.
Anthem has said it decided to move forward with the rate increases for DMHC-regulated plans after the managed care department and independent actuaries reviewed the health plan’s filings. The company noted that costs sometimes are higher for DMHC-regulated plans because of mandates that require the policies to cover maternity care and other services.
Kristin Binns, spokesperson for Anthem, said the company lost money on its DMHC-regulated policies last year and expects to do so again this year.
Further Scrutiny of Rates
After Anthem agreed to reduce rate hikes for the 600,000 DOI-regulated policyholders, DMHC conducted a second review of Anthem’s filings. The agency found that 121,000 of the DMHC-regulated policyholders would be paying more for comparable plans overseen by DOI.
On Thursday, DMHC asked the insurer to submit a report justifying the cost differences by April 25 (Los Angeles Times, 4/8).
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