California Insurance Commissioner Dave Jones said the nation's largest
health insurer, UnitedHealth Group Inc., is imposing unreasonable rate hikes on
about 5,000 small businesses.
Jones said Wednesday that UnitedHealth couldn't justify the average annual increase of nearly 8%, which reflects both higher premiums and a reduction in benefits. He said the rate hike, which went into effect Wednesday, affects up to 45,000 small-business employees and dependents and represents $12.5 million in higher costs.
"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," Jones said.
UnitedHealth, based in Minnetonka, Minn., said it was "disheartened" by Jones' comments and that the average annual increase for these customers is less than 2%.
A company spokesman said this change "is among the lowest requested increases of any health plan in California."
Under current law, Jones can object to a health insurer's rate increase, but he has no authority to block it.
A November 2014 ballot measure backed by Jones and consumer groups would change that and grant state officials the power to reject unreasonable rate increases for health coverage. The insurance commissioner has that authority for property and auto policies under Proposition 103.
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