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Obama administration joins criticism of health insurers in California

June 24, 2010 |  6:20 pm

Consumer groups and regulators criticized Aetna Inc. on Thursday after the insurance giant dropped a rate increase in California because of math errors in its calculations. Now the Obama administration has joined the fray.

Health and Human Services Secretary Kathleen Sebelius noted that Aetna is the second insurer to withdraw rate filings after mistakes were uncovered. Anthem Blue Cross canceled premium increases for many of its 800,000 individual policyholders in April but has pledged to submit new rates next month.

Both companies have acknowledged their troubles. Aetna chalked up its problem to "simple human error," and said that it reported the mistakes immediately to state regulators.

The Connecticut-based insurer killed its plan for an average 19% increase for its 65,000 individual policyholders in California. Company officials did not say whether they will submit new rates.

Sebelius, in a statement, said: "I applaud California for its decision to shine more light on skyrocketing insurance rates and demand more accountability after uncovering that a second insurer used faulty math to try to justify exorbitant health insurance premium increases."

She added: "As President Obama has said, Americans across the country have been at the mercy of insurers for far too long when it comes to premiums and prices. Finally, the power is shifting back to consumers."

Here is the full story about Aetna rate hikes from The Times' Business section.

-- Duke Helfand