California Insurer Rate Hikes to be Scrutinized by Analysts

It’s been big news here for a while now that several companies such as Blue Shield of California, Health Net, Anthem Blue Cross and Aetna have been proposing massive rate hikes for a long time, which has come under scrutiny of customers, legislators and heck, even the President. Well, in an article in the San Francisco Chronicle entitled, “Health insurance rates will get outside look,” state health regulators will hire third-party analysts to review the rate increases.

Apparently regulators made this move after an audit of Anthem, after they too announced their own rate hikes, and found numerous accounting errors in the calculation of these rate hikes. While the California Department of Insurance doesn’t have any direct control over the prices charged by these companies, they are hoping that even more outside scrutiny will help keep costs reasonable. Regulators do feel their actions have made a difference, however. “We want to use every inch of our regulatory ability to make sure consumers pay accurate rates,” said Darrel Ng, spokesman for the Department of Insurance. “We try to treat insurers as similarly as possible. After Anthem had their rates analyzed in this manner, we expanded it to the other major players in the market.”

Overall, as a customer of one of these companies and a resident of California, I think this is an awesome move on the people we elected to represent us. By bringing as much scrutiny on these rate hikes — which are usually caused by the companies’ own mismanagement of their own plans and funds, it seems — it’s hoped that shining a light on the problems with these rate hikes will either minimize them or make them go away entirely.

On the other side of the coin, analysts might find nothing wrong in their scrutiny of these four companies, and the rate hikes might be able to go on as proposed. I hope not, but we’ll just have to wait and see, as with nearly everything else health insurance related these days.