California health insurance companies are giving notice of huge premium increases as high as 26%, to the surprise of some and the consternation of most.

State Insurance Commissioner Dave Jones, speaking at a press conference Tuesday, said he was surprised, angered and stirred to action by the “unreasonable” rate increases, but he has virtually no power to make health insurers hold back on increases. California, unlike 37 other states, does not regulate health premiums.

But a measure is on the ballot to change that in November 2014, almost a year after President Obama’s Affordable Care Act (ACA) takes effect. Also on the 2014 ballot is an $11.1 billion water bond the state has been pushing back for four years.

California is no outlier. Insurance companies have been asking for, and receiving, double-digit rate increases across the country. Some states, like Florida and Ohio, have permitted 20% increases. The federal government, as part of the ACA, posts online all requests by health insurance companies for rate increases over 10%. The public and “experts” can analyze the rate increases, but aside from providing some transparency to the process, the system provides no recourse against the companies.

Jones said Anthem's premium hike for companies with 50 or fewer workers worked out to 11%, but some of the insured will see premiums as high as 26%. Generally speaking, employees with larger companies are better protected against rate hikes, while those with smaller companies or who buy directly from an insurance company bear the brunt of the increases.

Aetna, Anthem Blue Cross and Blue Shield of California have all indicated they want to raise health insurance rates by as much as 20-26%, although PricewaterhouseCoopers estimates that health costs may increase just 7.5% next year.

Robert Field, a professor of law and health policy at Drexel University, told American Public Media that health costs are leveling off and are not a justification to raise rates.

“A more likely scenario is that they are looking to lock in premium increases before Obamacare goes into effect,” Field said.

–Ken Broder

To Learn More:

Health Insurers Raise Some Rates by Double Digits (by Reed Abelson, New York Times)

Aetna Reduces Rate Following CalPIRG Ed Fund Review (CalPIRG)

Review of Anthem’s Rate Increase on Individual Policies (CalPIRG)

Are Insurers Hiking Rates Despite Health Care Reform (by Jeff Horwich, American Public Media)

California Regulator Scolds Anthem, Praises UnitedHealth on Rates (by Chad Terhune, Los Angeles Times)