Aetna’s 21% Rate Hike Amounts To ‘Price Gouging,’ California Regulator Says
by Chad Terhune, Los Angeles Times
California’s managed-care regulator slammed health insurance giant Aetna Inc. on Thursday for “price gouging” after it raised rates on small employers by 21%.
This marked the fourth time since 2013 that California officials have found Aetna’s premium increases on small businesses unreasonable.
Aetna, the nation’s third-largest health insurer, is raising rates by 21%, on average, for about 13,000 people covered by small employers. This change in premiums took effect July 1.
Shelley Rouillard, director of the California Department of Managed Health Care, said an Aetna executive rejected her request this week to lower the rates.
“Aetna’s pattern of unreasonable increases equates to price gouging in today’s market,” Rouillard said. “I strongly encourage small employers subjected to these unreasonable rate increases to explore more affordable health coverage options.”
Aetna just announced a $37-billion acquisition of rival Humana Inc.
That deal is part of an industrywide consolidation wave that has prompted concerns that reduced competition will further drive up rates for consumers and employers.
Anthem Inc., the nation’s second-largest health insurer, has been in negotiations to buy Cigna Corp., and Woodland Hills insurer Health Net Inc. agreed to be acquired this month by Centene Corp. for $6.8 billion.
Rouillard said she worries that mergers will reward investors at the expense of consumers.
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