State insurance commissioner presses case for power over health premiums

SONOMA -- California Insurance Commissioner Dave Jones continued to apply public pressure on Blue Shield of California and other large insurers for recent rate hikes, saying the increases will negatively impact individuals and small businesses disproportionally and that the increases aren't in tune with national medical inflation rates.

[caption id="attachment_70479" align="alignright" width="224"] Dave Jones[/caption]

In an interview with the Business Journal between speaking engagements in Sonoma County on Thursday, Mr. Jones laid out policy prescriptions he said might help alleviate the upward pressure on premiums, which are slated to increase at an average rate of nearly 12 percent for Blue Shield policy holders, while insisting that many health insurance carriers have unnecessarily raised rates.

Chief among his solutions included allowing the commissioner to reject what the Department of Insurance determines to be excessive rate increases, as is the case in 34 other states. 

"Unfortunately for California, it's one of the last states to give its insurance commissioner the ability to reject insurance or HMO rate hikes," he said. "What's particularly frustrating is that I can reject rates for auto insurance, medical malpractice, property-casual insurance," and other lines.

"This is a big missing piece of the Affordable Care Act," he added, noting that most of health care reform won't address the continued cost increases of health insurance for small business and individuals. 

As of March 1, both Blue Shield and Aetna Inc. went forward with rate increases of nearly 12 percent on some 268,000 policy holders, despite protests from both Mr. Jones and the Department of Managed Health Care.

Mr. Jones said he asked Blue Shield if it would consider a smaller rate increase that would have saved consumers about $16.5 million. The San Francisco-based nonprofit insurer declined.

Steve Shivinsky, a spokesman for Blue Shield, said the  rates are reasonable for several reasons, including that its premiums are competitive with, and in some cases lower, than its competitors, and that its rate increases are lower than other recent hikes from competitors.

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