California's insurance commissioner today criticized another rate increase by Anthem Blue Cross, saying the insurer is imposing "excessive and unreasonable" costs on small business owners.
Commissioner Dave Jones ripped Anthem for raising rates 5.2 percent effective Monday on about 7,000 small businesses and other groups. He said Anthem has raised rates 10.5 percent over the past year.
Jones acknowledged that under federal and state law, he's powerless to block the increases.
He said Anthem is imposing higher rates even though it earned a 25 percent return last year. "It's simply galling that Anthem Blue Cross would impose another increase on small employers," he told reporters.
But Anthem spokesman Darrel Ng said Jones was grossly overstating Anthem's earning power; the company's profit on small business customers last year was actually 1 percent, he said. The commissioner "is trying to rewrite the dictionary," Ng said.
The latest rate hike takes immediate effect on about 45,000 Californians, Jones said. But eventually, as more employers renew their coverage, it will affect about 250,000, he said.
Jerry Bircher, a Rancho Cordova businessman who chairs the California Small Business Association, told reporters that insurers "don't look at what it's costing small business to do business." The latest Anthem increase will cost his company, Express Office Products, about $5,000 a year, he said.
Anthem was going to raise rates on individuals 18 percent earlier this year but after getting a private request from Jones, it shaved the increase to 14 percent.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.