California Insurance Commissioner Dave Jones on Wednesday slammed UnitedHealth Group — the nation’s largest private insurance company — over its decision to cut benefits and raise premiums for health plans used by close to 5,000 California small businesses. The combination of cuts and hikes would amount to a nearly eight percent rate hike for small business owners and their employees.
“At a time when small businesses are struggling to survive, UnitedHealthcare’s rate increase is just one more unwarranted economic burden on California’s small business owners and their employees,” said Jones. He estimated that close to 45,000 small business employees could be affected by the hikes.
Jones’ comments were quickly dismissed by UnitedHealth, as a spokesman argued that the annual increase would merely be two percent for customers. But that two percent figure likely only take into account the requested premium rate hike, not the cuts to benefits provided on relevant health plans. Previous, seemingly-arbitrary rate hikes by UnitedHealth and other insurers have led Jones to become a vocal advocate for greater insurance commission authority on the issue, and he has been pushing for the passage of a 2014 popular referendum that would “grant state officials the power to reject unreasonable rate increases for health coverage.”
This certainly isn’t the first time that UnitedHealth has engaged in profit-seeking behavior at the expense of government and employer health expenditures and workers’ benefits. The company recently complained that it wasn’t receiving enough government money despite massive profits and favorable Medicare reimbursement rates, and is one of several companies using Obamacare as a scapegoat for its extravagant rate increases.
In fact, arbitrary rate increases were par-for-the-course long before Obamacare’s passage, and the reform law actually contains protections against sticker shock and fallback measures for Americans who cannot afford private insurance coverage. But given UnitedHealth’s and other insurers’ quests for ever-increasing profits, many state insurance commissioners are looking to more closely scrutinize rate requests to see if they are reasonable.