AB 1163 Requires 60-Day Advance Notice of Rate Increases
January 13, 2011
Dave Jones, the new California insurance commissioner, is asking big carriers to refrain from increasing premiums for at least 60 days after the effective dates of their most recent rate filings.
The request would affect carriers with increases already set to take effect between January 1 and April 1.
California health insurers have asked for a series of increases in individual rates this year.
The insurers have attributed the requests to increases in overall health care costs and use of health care services; the effects of new state and federal benefits requirements, including the new federal Patient Protection and Affordable Care Act (PPACA); and a severe recession that is leading healthier holders of individual coverage to drop their coverage.
The California insurance commissioner has no authority to reject a request for a premium increase, but a commissioner can review an increase notice to ensure that it meets California filing requirements, Jones says.
A new state law, created by California Senate Bill 1163, requires a health plan or health insurer to provide an actuarial analysis explaining the need for an increase.
The new law also increases the advance notice period for a health rate increase to 60 days, from 30 days.
Jones says he is asking for spacing between increases to give himself more time to apply state rate filing review requirements.
“I am very concerned about the impact of the premium increases that health insurers are proposing, increases that I have not had the opportunity to review,” Jones says in letters addressed to large California health carriers.