Math Error Found In Aetna Health Care’s New California Premiums

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The Department of Insurance said it found "substantial
mathematical errors" in the rate filings submitted by Aetna, which had
planned to raise premiums by an average of 19 percent on 65,000
Californians who buy insurance on their own.

As a result of the
latest errors, Insurance Commissioner Steve Poizner said he would "take
the exceptional step" to post future rate filings on his agency’s
website to allow for easier public review.

"I believe an
additional level of transparency is warranted," said Poizner.

It was the second time in as many months that the department
uncovered flaws in calculations used by a major health insurer –
intensifying calls by industry critics clamoring to give state
regulators the authority to review rates before they are imposed on

"This just confirms that we need to take a closer look
at every rate filing," said Jamie Court, president of Consumer Watchdog,
a left-leaning Santa Monica-based advocacy group.

"It’s amazing
how insurers are making mathematical errors," he said, "when they’re not
used to regulators checking their math."

Court praised Poizner
for taking Thursday’s action.

Aetna filed its new rates with the
Department of Insurance in March and they were to be enacted next
Thursday, said Anjanette Coplin, a spokeswoman for Aetna, in an e-mail.

said the company continued to review its rates and found the error. It
reported the error to state regulators on its own, she said.

called the math error "a simple human error."

"As soon as we
uncovered this mistake, we informed the California Department of
Insurance," she said.

"There is no impact to our members with
individual health plans in California. We have not yet implemented the
proposed rate changes."

The company, however, said it planned to
submit a revised rate filing.

"This is yet another example why
it’s absolutely essential the insurance commissioner review proposed
rate increases," said Assembly Dave Jones, D-Sacramento, who is running
for the post.

Jones is sponsoring legislation that would give
state regulators the ability to reject premium increases they deem
excessive – similar to what is in place for car and property insurance
under 1988’s Proposition 103.

The legislation, Assembly Bill 2578,
has passed through its own chamber and won passage Wednesday in the
Senate Health Committee – where a similar proposal died two years ago
under heavy lobbying from the insurance industry.

"Even though
Aetna is withdrawing its rate increases, there’s nothing to stop them,"
Jones said, from refiling new rates. "I have every expectation that they
will raise those rates."

Earlier this year, the Department of
Insurance hired an outside actuary to review rate filings submitted by
Anthem Blue Cross.

The company came under scrutiny amid political
and public furor over rising insurance premiums. Anthem’s plan to raise
rates by as much as 39 percent for 700,000 customers further stirred the

In May, state regulators reported that Anthem’s rate
filing was riddled with miscalculations, prompting the insurer to
rescind its rate filings until it could resubmit a new one. The company
has yet to do so.

The rate increases that had been planned by
Aetna were not as dramatic as those proposed by Anthem.

growing skepticism over insurance rates prompted the Department of
Insurance to review rate filings by the state’s four largest providers
of health coverage for people who don’t get insurance through work –
Aetna, Blue Shield, Health Net and Anthem Blue Cross.

Contact The Bee’s Bobby Caina Calvan, (916)
321-1067 or [email protected]

Consumer Watchdog
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