According to the California HealthCare Foundation, since 2002, workplace health insurance premiums in California have risen 185 percent, far outpacing the state’s inflation rate of 33 percent. This increase in employers’ health insurance rates is expected to continue even as medical spending is down and uncompensated care has decreased significantly.
With these factors in mind, employers and employees throughout the state have begun to ask why insurers are not negotiating with hospitals for lower prices and then reducing premiums.
In fact, Aetna Inc., the third largest health insurer in the U.S., will raise premiums for some small businesses by as much as 20 percent in 2015. California’s Insurance Commissioner Dave Jones recently called the rate hikes excessive. He has no authority to stop them, however, since Proposition 45 was rejected by voters in November. The proposition would have given the commissioner the power to prevent rate hikes which his department found to be excessive.
Aetna claims the rate hikes are proportionate to expected medical costs. The insurer’s state filings estimated a 7.1 percent rise in medical costs due to higher prices from providers and the increased number of patients receiving care.
Despite the defeat of Proposition 45, the debate over fair insurance premiums for employers continues, and the matter is likely to be raised again in the Legislature.
A recent article in The Los Angeles Times has more on the projected insurance costs for California employers and employees in 2015.
Disputes between employers and insurers are not uncommon, and the legal issues involved are complex. If you are engaged in a dispute with an insurance company, then an attorney who is fluent in the complex language of insurance policies can delve into your documents to determine whether the insurer is unfairly denying or limiting your claim.
If you would like to learn more about insurance coverage and bad faith, then our litigation overview is a good place to start.