Insurers seeking to raise their rates after enjoying substantial profits in recent years will be unlikely to win approval, Insurance Commissioner John Garamendi warned Thursday. Garamendi, who’s running for lieutenant governor next year, had harsh words for a panel of insurance executives at a Los Angeles hearing. Pointing to premiums he said had increased more than 60 percent in the past four years, he challenged five companies to prove they aren’t using the increased premiums for unfair profits. “If you bring requests for increases to me, expect the worst,” he warned as the hearing concluded. “This department isn’t going to be the lapdog anymore.” Thousand Oaks-based Blue Cross Life & Health Insurance Co., which has clashed repeatedly with Garamendi in the past, bore the brunt of his attacks in the three-hour hearing. He also questioned executives from Woodland Hills-based Health Net Life Insurance Co., Aetna Life Insurance Co., PacifiCare Life and Health Insurance Co. and United Healthcare Insurance Co., with the goal of formulating public policy and legislative changes for the industry. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREBlues bury Kings early with four first-period goals “We’re in this business to provide insurance and stay solvent,” said Robert Alaniz, regional vice president of communications for Blue Cross’ parent company, WellPoint. “To do that, we have to stay profitable.” Though Garamendi wouldn’t specify what level of profitability he finds acceptable, he made clear that Blue Cross’ margins near 25 percent are not. Blue Cross argued that while it does earn substantial money from its preferred provider organization plans, they’re offset by lower margins in its health maintenance organization plans. Statewide, regional vice president of state affairs Ann-Louise Kuhns said the company earns about 6 percent margins. The insurance commissioner took a skeptical tone, questioning the company at length with a confrontational style. He took particular issue with the company’s pending request to raise premiums on its Tonik plan, which it introduced last year to cater to younger customers who have often not bought health insurance. “Your efforts to reduce administrative costs hasn’t resulted in lower premiums, but higher profits,” Garamendi said at one point. “The beneficiary of your efforts isn’t the consumer, but the bottom line.” The tone moderated at some points, with Health Net vice president, chief financial officer and treasurer Roupen Berberian actually welcoming the hearing. Garamendi said he plans to hold more in the future to formulate strategy to limit health care cost increases. “Quite frankly, I wish we had more opportunities to discuss things like this,” Berberian said. “If we could work together like this, we could solve some of the problems we face in California.” Brent Hopkins, (818) 713-3738 [email protected] 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!
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