Following in the footsteps of Anthem Blue Shield and PacifiCare, Aetna Inc. has become the third major health insurance company in California to announce that it was stepping back from its proposed rate increase there. Now, instead of roughly 43,000 Aetna policyholders being handed a rate hike of 17.9%, their insurance will go up only 12.2%. This decision came after the insurer agreed to postpone any increase to July 1, in response to a request from Dave Jones, the California Insurance Commissioner.
The reduced rate increase will likely save Aetna’s policy holders $6.7 million in premiums, and, according to Mr. Jones, the sixty-day delay added another $1 million to that savings.
Aetna isn’t reducing its rate increase without protest, however. The insurance company maintains that the rising cost of medical care is necessitating an increase in health insurance costs, and that a limit on the company’s ability to raise rates could be detrimental to its future. Addressing this in a statement, a representative of the company wrote, “Long term, our financial viability in the individual health insurance market in California could be impacted by the inability to implement rates which adequately address the rising cost of health care services in the state.”
Commissioner Jones also made a statement about Aetna, saying, “Aetna policyholders will benefit from Aetna’s decision to lower their proposed July 1 rate increase. Aetna has agreed to a reduction of their most recent increase, but Californians have experienced unsustainable health insurance increases year after year and they want me to have the authority to reject excessive rate increases. A.B. 52, which would give me that authority, passed out of the Assembly Health Committee this week.”
The announcement from Aetna represents the latest success in Jones’s push to expand the regulatory role of his office in the health insurance market.