Insurance Regulators Show Some Bite
The two major insurance regulators in California have gone to the mat with healthcare carriers about premium hikes and coverage for autism therapies.
The Department of Managed Health Care on Wednesday announced it had come to terms with Anthem Blue Cross of California and Aetna to moderately reduce upcoming or recently implemented premium rate hikes or freeze them altogether.
According to the DMHC, Anthem had agreed to cut an average 15% rate hike for 94,000 individual policyholders to 12.5%, saving policyholders $11.5 million in additional premiums. Anthem also said it would reduce a 4% average premium increase to 3.7%.
Anthem also agreed to not seek rate increases for small group policies that are renewing in the third quarter of this year, which is projected to save policyholders about $6 million.
Aetna also agreed to cut a small group premium increase from an average of 10.9% to 10.6%.
Altogether, the agreements with the DMHC, with regulates most managed care plans in California, total $19.3 million in savings for policyholders.
However, the DMHC could not reach terms with San Francisco-based Blue Shield of California to cut an average 11.8% rate increase on 27,000 individual policyholders that went into effect on March 1. The agency could also not persuade Aetna to pare back an 11.4% increase on 20,000 small group enrollees that goes into effect on April 1.
DMHC Director Brent A. Barnhart announced that both increases were unreasonable, and unsupportable based on the plans' historical and projected medical trends and their assumptions about the utilization of care by those enrolled in the plans.
“I am disappointed that after lengthy negotiations, Blue Shield and Aetna were unwilling to bring their proposed health plan increases down to a reasonable level,” Barnhart said.
Blue Shield of California spokesperson Steve Shivinsky defended the rate hike, claiming the rates were in line.
“Our rate increases are lower than recent rate increases approved for most of our major competitors,” Shivinsky said. He added that Blue Shield's premiums are in many instances lower than its competitors, and that the insurer has lost “tens of millions of dollars in the individual market in recent years.”
Neither the DMHC nor the California Department of Insurance has the regulatory authority to reject rate increases imposed by insurers. However, both agencies in recent years have declared some rate increases to be unreasonable, and have used their bully pulpits to bring insurers to the table and work out reductions.
Meanwhile, California Department of Insurance Commissioner Dave Jones filed emergency regulations last week with the Office of Administrative Law to address alleged delays in treatments for children with autism.
“Children diagnosed with autism should not be denied or delayed in obtaining the life-changing treatment that they so desperately need,” Jones said in a prepared statement. “Many insurers are failing to comply with California law that mandates medically necessary treatment.”
As part of the regulation filed by the Department of Insurance, limits on treatment visits would be banned. Caps on dollar amounts of coverage would also be lifted unless they apply equally to all other benefits provided by the policy. And there would not be delays or exemptions for treatment coverage based on I.Q. or other cognitive testing of patients, or that treatments were considered experimental.
In 2011, Gov. Jerry Brown signed into law SB 946, which required all health plans as of July of last year to cover an autism treatment known as applied behavioral analysis. Many insurers had balked at covering the treatment, citing its costs and uneven training and credentials for its practitioners.
The Department of Insurance said it had received 71 individual complaints about delays in obtaining treatment for autism. The average delay in obtaining treatment was nearly two years per case, and the complaints did not abate with the passage of the new law last year.
“This regulation will clarify insurers' obligations to provide these critical services,” Jones said.
The DMHC has not yielded to demands of loosening autism treatment guidelines, and continues to fight advocacy groups in state court regarding the issue.
Additionally, Jones’ office said it would hold a press conference today discuss his options regarding a recent Blue Shield rate filing that would increase rates by as much as 19.9% Jones considers the hikes unreasonable.. As with the plans regulated by the DMHC, Blue Shield enacted the premium hikes were enacted on March 1.
