Gov. Schwarzenegger Poises to Enact Health Insurance Rate Reviews

Published: Thu 08 Jul 2010

Perry Begay

On Wednesday, Governor Arnold Schwarzenegger moved to implement a critical component of the new national health care reform law, pursuing a $1-million grant from the federal government to bolster California's health insurance rate review process.

Most of the funds would pay actuaries to review rate hikes proposed by health insurers. The governor also would like health insurance companies' proposed increases to be published on their Websites as well as the sites of state regulators.

The national healthcare overhaul mandates the establishment of a review process at the state and federal levels for "unreasonable" premium increases. How the government will define "unreasonable" is still being determined, but the legislation offers grants to states to start the reviews. The government will announce the grants this August.

"The state's proposal will provide greater consumer protections by requiring all premium filings to be reviewed and certified by an independent actuary to ensure premium costs are accurately calculated," the office of the governor explained in a statement.

A few of the governor's proposals will need approval from the Legislature, which is currently evaluating bills that would provide regulators with the authority to reject health insurance premiums.

The California Association of Health Plans was not immediately available for comment.

Two of the largest health insurers in California-Aetna and Anthem Blue Cross-have drawn criticism for submitting rate increase proposals that contained significant mistakes. Both health insurance companies withdrew their proposals when an external actuary discovered the errors. Both insurers resubmitted their proposals last week.