Well, California Insurance Commissioner thinks so. Health insurance giant Aetna has raised health insurance rates for small employers by an average of 8% annually as of April 1st, affecting 77,000 small business employees and their dependents in California. California Insurance Commissioner Dave Jones has called the health insurance hikes “unreasonable,” but stated that he has no power to block the health insurance increases. Commissioner Jones has called on California voters to back a proposal which would give the California Insurance Commission the power to reject proposed health insurance rate hikes.
The California Insurance Commission had asked Aetna to delay the proposed health insurance hikes, noting that the Aetna subsidiary that sells health insurance in California made a 27.7 percent profit in 2011 and paid $1.7 billion in dividends to its parent company. “Small employers are struggling in this economy and should not be hit with a 30% increase in just 24 months for health insurance for their employees,” Commissioner Jones said.
Aetna released the following statement: “While rate increases are never easy, our rates are based on actuarially sound data and reasonable projection of future cost, which will impact approximately 16,000 customers. Our Medical Loss Ratio is at 86.7%, which is higher than any of the filed rates by our competitors. Medical loss ratio is the percentage of health insurance premiums that insurers use to provide health care to their customers.”
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