Aetna withdraws California rate increase after math errors found

By Megg Mueller on September 4th, 2010

Maybe it's too hard to think with all the sunshine in the Golden State. It definitely seems hard to do math, if the recent withdrawal of Aetna's proposed rate hike this month is any indication.The filing for the health insurance giant's 19 percent increase was found to include "significant mathematical errors," California's Insurance Commissioner Steve Poizner said in a released statement. Aetna found the errors, and Poizner said, self-reported the issue.

Aetna isn't alone in its faux pas; it followed Anthem Blue Cross down the path of shame when that insurer announced a 39 percent rate increase earlier this year, only to eventually withdraw it for math errors also. The federal government had weighed in, before Anthem withdrew its increase, with Secretary of Health and Human Services Kathleen Sebelius saying Anthem's reason for the increase was "difficult to understand" in the face of the company's recent profits.

While Californians heaved a collective sigh of relief after the increases were torpedoed, Poizner took action in an attempt to ensure any filings by Aetna, Anthem, or the other two major players in the state -- Health Net and Blue Shield -- don't contain such errors. The filings will now be posted on the California State Department of Insurance website in an effort to increase transparency. The public will now be able to go over any future filings, and you know, some math whiz out there is dying to be the one to discover such a mistake.

It's great that the state is going to start checking these figures, but it is a little shocking that no one thought to run the numbers before. Increases such as these affect a huge number of Californians. But less you think this ends the skyrocketing rate-increase idea, remember that California's health insurance companies don't have to get prior approval for increases. One can only hope that after these fiascos health insurance companies think twice before trying to slip an increase by a now-wiser public.

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