California Insurance Commissioner Dave Jones on Wednesday accused Anthem Blue Cross of imposing “excessive” rate hikes on 120,000 customers covered by the company’s small-business policies.
The announcement gave Jones another opportunity to urge voters less than two weeks before the November general election to vote for Proposition 45, a state ballot measure that would give the elected commissioner the power to reject increases the regulator deems unreasonable.
“There’s nothing in California (law) that precludes companies from charging excessive rates,” said Jones, who referred to Anthem’s 9.8 percent average rate increase, which took effect on Oct. 1, as unjustified.
Officials from the campaign against Prop. 45 accused the commissioner of timing the action to coincide with the election. “He’s always shown he’s willing to use this for political grandstanding purposes,” said Robin Swanson, spokeswoman for the No on Prop. 45 campaign, which is led by the health insurers.
The insurers, primarily Anthem and Kaiser Permanente, have contributed more than $55 million to defeat the measure. Meanwhile, the proponents have raised less than $3 million.
Anthem Blue Cross officials defended the rate increase and said they could not accept Jones’ recommended 2.1 percent increase without incurring losses.
“Health care costs continue to increase due, in part, to the cost of pricey new specialty drugs that can cost $1,000 per day,” said Anthem spokesman Darrel Ng. “Unfortunately, Anthem Blue Cross could not comply with the commissioner’s request, which would have led to widening losses in this part of the small group market regulated by the Department of Insurance.”
Jones also accused the insurer of raising prescription drug benefit costs by 21.4 percent and using an “accounting maneuver” to mask its profits. He said the company shifted money to make its profits appear smaller.
But Ng said the “accounting maneuver” was necessary to offset losses in a different part of the company’s business.
Victoria Colliver is a San Francisco Chronicle staff writer. E-mail: [email protected] Twitter: @vcolliver
