News Release

Sacramento, CA – The California Department of Insurance issued a statement today finding new rate increases of up to 21.4% annually for some small business health plans sold by Aetna unreasonable.  Aetna attempted to justify the increases with projections for medical costs in excess of their actual experience and also in excess of federal measurements of medical inflation.

“This is an another example of insurance companies using faulty assumptions and shady calculations to bump their bottom line at the expense of California consumers and small businesses,” said Austin Price, Health Care Associate, CALPIRG.

Since the law requiring insurance companies to publicly release justification for proposed rate increases took effect Jan 1, 2011 it has saved California consumers with plans registered under DOI over $107 million by putting public pressure on insurers to reduce excessive or unjustified rate hikes.  The law requires public disclosure of proposed increases but does not grant the Commissioner the authority to reject unjustified increases.  Aetna’s latest increases were the first to be implemented despite requests from the commissioner to withdrawal or lower the proposal.  

Nationally small businesses pay18 percent more than larger firms for the same health insurance policy.  Small businesses are also far less likely to offer any sort of health insurance to employees than larger firms, and that disparity has been increasing in recent years.

“Health care costs impact the health of small businesses employees and their bottom line.  If politicos in Sacramento and Washington are serious about creating quality jobs in America they should embrace efforts to rein in unsustainable health costs for small business owners and their employees.” said Price.

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CALPIRG is a non-profit, non-partisan public interest advocacy organization. For more information, visit http://calpirg.org .