Aetna is ending the year just like it started, with state regulators saying the insurance company has hiked premiums excessively, and there is nothing they can do about it.
The California Department of Insurance actuaries announced today that Aetna Life Insurance Company's most recent small group health insurance rate increase was unreasonable. Aetna is increasing rates for small businesses and their employees by an annual average of 27.4 percent, affecting over 40,000 employees and costing small businesses a projected $5.5 million in excessive rates. Unlike 35 other states, California regulators do not have the legal authority to reject excessive health insurance rate increases.
In the past year alone, Aetna has cost small businesses $68 million in unjustified and unreasonable rates, according to the Department of Insurance and the Department of Managed Health Care.
Senator Dianne Feinstein and Congressmember Jan Schakowsky introduced legislation in Congress last week to give the Department of Health and Human Services the authority to reject excessive rate hikes in those states, such as California, where regulators do not. Since 2012, health insurance companies have imposed more than $355 million in rate hikes deemed by the Department of Managed Health Care and the Department of Insurance to be unreasonable.
Last year, insurance companies spent $56 million to defeat Proposition 45, which would have required health insurance companies to open their books and justify rates, and allow state regulators to reject excessive increases.