California Insurance Commissioner Dave Jones said Anthem Blue Cross 
failed to justify premium increases averaging 8.7% on individual health insurance policies grandfathered under Affordable Care Act rules.
According to the agency, the increases will cost nearly 170,000 California consumers some $33.6 million for grandfathered policies. These are individual or group health plan policies. These are individual or group health plan policies which were purchased before March 23, 2010 and remain exempt from several requirements under the Affordable Care Act.
Jones said Anthem’s rate increase is “unjustified and unreasonable” based on its claims experience, prescription expenses and the projections it used. His agency does not have authority to order the company to change its rates.
Over the last 24 months Anthem has raised rates on members in these grandfathered policies an average 26.5%, Jones said.
Anthem Blue Cross told the state it expected medical costs for those covered by the grandfathered plans to rise by 9.5% this year, mostly because of higher prices for prescription drugs.
“More high-cost, mass-market specialty drugs are expected to be released in the next year, further increasing medical costs and contributing to higher premiums,” said Darrel Ng, a spokesperson for the company.
California law gives the commissioner authority to approve or deny rates for auto, home and some other types of insurance, but health insurance rates are not subject to such regulation.
