For Release: June 24, 2010
Media Calls Only: 916-492-3566
Second Health Insurer Withdraws Rate Hike Filing After Poizner's Actuarial Review Process Finds Major Math Errors
Poizner to Create Unprecedented Transparency, Release Future Health Insurance Rate Filings
Insurance Commissioner Steve Poizner announced today that Aetna has withdrawn its rate filing that would have increased rates by an average of 19 percent on its 65,000 policyholders after substantial mathematical errors were uncovered during the process of conducting an additional actuarial review.
"First, we found major problems with the Anthem Blue Cross rate filing," said Commissioner Poizner. "Now, additional scrutiny has revealed that Aetna's filing has significant mathematical errors. Given that two of the four major health insurers have provided rate filings containing math errors, I believe an additional level of transparency is warranted. I have decided to take the exceptional step to post future individual health insurance filings on the Department of Insurance's Web site. I'm hopeful this public disclosure will add additional pressure on insurers to avoid errors. It will also allow any member of the public to scrutinize these rate filings and will, in the end, minimize rate increases by keeping markets as competitive as possible."
The errors were found independently by Aetna and actuaries working for the California Department of Insurance (CDI). Aetna continued to review its rate filing after submitting it to CDI and self-reported the error.
Commissioner Poizner announced
last week
that the rate filings of Aetna, Anthem Blue Cross, Blue Shield and Health Net - the four largest insurers in the individual health insurance market in California - will be given an additional level of scrutiny by having them analyzed by an outside actuary. Unlike auto and homeowners insurance rates, health insurance rates do not require prior approval by the Department of Insurance. However, state law requires that 70 cents of every dollar collected in health insurance premiums be spent on medical benefits. This additional actuarial review will scrutinize each filing to make sure companies comply with the 70 percent threshold.
Today's announcement is the second major health insurer to have withdrawn its rates due to math errors discovered during this process.
Anthem Blue Cross announced in April
that it would withdraw its filing to raise rates by an average of 25 percent. Anthem Blue Cross has yet to make a new rate filing.
Future rate filings will be made public on the Department of Insurance's Web site. Auto, homeowners and other lines of insurance regulated by Proposition 103 already have their rate filings published online.
Aetna Withdraws Rate Filing After Errors Found
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