Major Health Insurers Agree to Lower Rate Increases for Small Employers

Three of California’s major health insurers have agreed to lower their July rate increases. After review by the Department of Insurance, Anthem Blue Cross, Blue Shield, and Aetna agreed to modify their most recent small group rate increases for this quarter. Small group policies are available to small employers with two to 50 employees.
Anthem Blue Cross is withdrawing its 2.5% July 1st premium increase for small-group PPO products. The withdrawal will save about $25 million for 45,000 of Anthem Blue Cross’ small group policyholders, covering approximately 280,000 individuals. Anthem has raised rates 4.7% on its small group policyholders in the previous 12 months.
Blue Shield Life and Health Company will provide a credit to 58,000 small employers (covering approximately 265,000 individuals) equivalent to reducing its July 1st third quarter rate increase by 1.5%. As a result of the credit, the effective Blue Shield rate increase will be 1.6%, which is Blue Shield’s only small group rate increase for its small employer policyholders in the past 12 months. This modified rate increase will save policyholders approximately $15 million.
Aetna will lower its proposed small group rate from 2.6% down to 1.3% for its 9,200 policyholders (covering approximately 69,000 individuals), which saves about $8 million for small employers. Small employers have already been billed for July and August for the July 1st rate increases, but will see credits on their August or September bills.