Dept. of Insurance Calls United’s Rate Increase Unreasonable


California Insurance Commissioner Dave Jones

The California Department of Insurance calls it excessive and unreasonable for United Healthcare to issue a 4.9% quarterly average rate increase on small business policyholders. The increase, which became effective May 1, affects about 12,000 employees and their dependents this quarter and will affect more than 45,000 when their policies renew later in the year. Key findings include the following:
• Department actuaries determined that the actual 12-month average increase on these small businesses is 7.7% when you include benefit reductions.
• Department actuaries say United did not provide substantive evidence to support its rate increase. They say United Healthcare overestimated its trends for costs and numbers of claims.
• United’s percentage of premium attributable to covering administrative expenses is significantly higher than the market average in California.
• United’s Healthcare’s company-wide return on equity for 2011 was 55%, and 53.7% for 2012.
• The margin on revenue for the company’s California business exceeds other carriers as well.

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Last Updated 06/29/2022

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