California Insurance Chief: Bar Anthem from Small Business Marketplace

By Mina Kim, KQED

California's insurance commissioner Dave Jones says Anthem Blue Cross shouldn't be allowed to sell small business health plans on Covered California, the state's new health insurance marketplace being set up under the requirements of the federal health law.  Jones says Anthem, the state's largest insurer, has been engaging in a "pattern" of "excessive" rate hikes.

"It simply cannot be the case that a health insurer can unreasonably gouge its small business customers and not face any consequences whatsoever," Jones said.

Under state law, Jones can review health plan rate hikes and declare them unreasonable, but he lacks authority to block them.

Covered California's Peter Lee says he's taking the Commissioner's request into consideration.

"But the first thing we want to make sure is that we have a good mix of plans that have affordable prices and good networks of doctors and hospitals that will serve consumers," Lee said.

Lee already approved Anthem Blue Cross for the state's individual health plan market. Anthem spokesman Darrel Ng says the company's recent rate increases are all in line with state projections of rising health care costs.

"We look forward to working with Covered California to bring these competitive rates to the small group exchange," Ng said.

Excluding such a large insurer from the small business exchange could reduce competition. Last month, Covered California released preliminary plans and premiums for the individual marketplace. The agency is expected to release small business plans and premiums sometime this summer.