Over 5,000 small businesses in California are facing large health insurance premium rate hikes in 2015, reaching double-digits on average, according to the Los Angeles Times.
Aetna, the third-largest health insurer, is upping premiums by as much as 20 percent on small businesses in California beginning Jan.1, sparking state insurance commissioner Dave Jones to roundly criticize the hikes.
Jones’ office claims Aetna’s hikes, which reach 10.7 percent on average, will cost small employers $23.5 million in “excessive premiums;” the state had argued that Aetna should have increased rates by only 2.6 percent for group of 64,000 employees and dependents.
“There should be savings passed on to businesses and consumers,” Jones told the L.A. Times. “Employers large and small should be asking their health insurer why they aren’t benefiting. What is frustrating for me is I know these rates are excessive and I can’t do anything about it.”
Jones lost a bid in November’s elections to gain the ability to deny rate increases to California health insurers. Voters roundly turned down Proposition 45 with almost 59 percent voting against it.
Jones accused Aetna of hiking rates in response to the proposition’s failure, which the company denied.
“While rate increases are never easy, our rates are based on actuarially sound data and a reasonable projection of future cost,” Aetna spokeswoman Cynthia Michener told the L.A. Times. “Increases in medical costs and utilization for our members enrolled in our small group plans continue to exceed the rate at which we have been able to increase premiums.”
Like most other health insurers, Aetna has been increasing premium rates across the country. CEO Mark Bertolini has been critical about Obamacare and warned the law would increase premiums. The company’s earnings have beat expectations so far in 2014. (RELATED: Large Insurance Companies Are Raking In The Cash, Thanks To Obamacare)