When Health Insurance Plans' Rate Increases Are Approved
Recently, proposed health insurance rate increases have come under heavy controversy
. The state of California has been the center of much of the hoopla. Most infamously, WellPoint asked for increases of up to 39 percent during a recession, far beyond the rate of medical controversy. The Obama administration used the public outcry as a rallying tool in order to pass their healthcare reform law this spring. For its part, WellPoint later admitted that there were several clerical errors in its calculations. Eventually, smaller increases were approved.The most recent health insurer to come under fire is Aetna. However, their conflict with the state's regulators was settled differently. In their case, an average rate increase of 19 percent was approved last week. The insurance commissioner determined that the request was legitimately based on the higher cost of health care. An earlier request was denied due to errors in their calculations.
What can the 65,000 customers that will be affected by the changes do now? The health insurance plans will become more expensive on October 1st, leaving little lead time for preparation. Granted, Aetna has proposed these increases for months, and has hopefully warned its policyholders previously about the likelihood of such.
Shopping around for health insurance is an option. Unfortunately, it may be relatively ineffective for many. Four health insurance providers, Aetna being one of them, control 90 percent of the state's market. The others--Health Net Inc., Anthem Blue Cross, and Blue Shield of California--will also have rate increases become effective in October. However, comparison shopping is still worthwhile, since certain plans may be differently affected depending on the company.
The national healthcare reform legislation aims to give state regulators more power over regulating rate increases. The Department of Health and Human Services will also be able to challenge increases it considers "excessive" and "unconscionable"; its definitions may differ from those used by individual states. That may decrease the likelihood of this occuring in the future if the provision has enough teeth, although insurance companies will have the right to appeal.
When Health Insurance Plans' Rate Increases Are Approved
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