Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration's health care law was to stem the rapid rise in insurance costs for consumers.
Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.
In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers' filings with the state for 2013. The rate requests in California are all the more striking after a 39 percent increase sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed two years ago.
In other states, such as Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The increases can amount to hundreds of dollars a month.
The proposed increases compare with about 4 percent for families with employer-based policies.
Under the health care law, regulators now are required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal website, www.healthcare.gov, along with regulators' evaluations.
The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places such as New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.
New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to less than 10 percent. California can review rate requests for technical errors but cannot deny rate increases.
The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.
Critics, such as Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.
"This is business as usual," he said. "It's a huge loophole in the Affordable Care Act," he said.
While Jones has not yet weighed in on the insurers' most recent requests, he is pushing for a state law that will give him that authority. Without legislative action, the state can only question the basis for the high rates, sometimes resulting in the insurer withdrawing or modifying the proposed rate increase.
The California insurers say they have no choice but to raise premiums if their underlying medical costs have increased. "We need these rates to even come reasonably close to covering the expenses of this population," said Tom Epstein, a spokesman for Blue Shield of California. The insurer is requesting a range of increases, which average about 12 percent for 2013.
Although rates paid by employers are more closely tracked than rates for individuals and small businesses, policy experts say the law has probably kept at least some rates lower than they otherwise would have been.
"There's no question that review of rates makes a difference, that it results in lower rates paid by consumers and small businesses," said Larry Levitt, an executive at the Kaiser Family Foundation, which estimated in an October report that rate review was responsible for lowering premiums for 1 out of every 5 filings.
Federal officials say the law has resulted in significant savings. "The health care law includes new tools to hold insurers accountable for premium hikes and give rebates to consumers," said Brian Cook, a spokesman for Medicare.
California rate filings
Proposed rate increases for some policy holders in California, according to the insurers' filings with the state for 2013:
Aetna proposes rate increases up to 22 percent
Anthem Blue Cross seeks increases up to 26 percent
Blue Shield of California proposes increases up to