California's Department of Managed Health Care has deemed a May 1 increase for 120,000 members of Anthem Blue Cross "unreasonable," but doesn't have the power to block it.
"This is the first time that either California regulator has declared a rate increase as unreasonable under the standards set by the new rate review law," said Lynne Randolph, a spokesperson for the DMHC. "In the spirit of providing maximum transparency to consumers about rate increases, we have little choice but to publicly express our disappointment that Anthem Blue Cross didn't lower the rates as we requested."
The rate hikes, which range from 14.4 percent to 16.7 percent, come less than a month after the DMHC asked Anthem Blue Cross to justify the rate increases to PPO members under its jurisdiction when it had recently agreed to back off rate increases for similar policies that are under the jurisdiction of the California Department of Insurance.
According to the Los Angeles Times, Anthem thought it had the DMHC's blessing on its planned rate hike after an independent review conducted by a state-hired actuary showed the increase to be "not unreasonable or unjustified."
The rate squabble is only the latest for the DMHC, which oversees insurance products for the managed care market in California. Late last month, the department asked Blue Shield of California to justify its planned 37.5 percent increase for 70,000 members in its managed care plans.