A California health insurer is following through on plans to submit its large rate hike proposals to an independent third party, it confirmed Friday afternoon.
Blue Shield of California drew criticism earlier this month by proposing to hike some individual rates by up to 59 percent. On Friday morning, the company said it would submit its rates to an independent actuary and would provide rebates to customers if the rates were found to be too high.
A few hours after issuing the morning press release, the company retracted the release without further explanation.
However, a few hours later, the company re-issued the original press release, again without explanation.
The company’s plan is already receiving pushback from California. The state insurance commissioner expressed disappointment the company didn’t inform it about plans to hire an auditor.
"We are surprised and disappointed that the message from Blue Shield came out before the conversation with the Commissioner," the insurance commissioner's office said in a statement to CNN. "They said it was a mistake and apologized."
Federal regulations proposed last month would require states to review proposed insurance rate hikes of at least 10 percent in 2011. The federal government cannot block the rates from being implemented, but it will require insurers under scrutiny to publicly justify rate increases.
The actuary hired by Blue Shield can consult with the Insurance Department, and he will try to complete the review in 30-45 days, according to the Blue Shield release. He will determine if the rates are “excessive, unjustified or unfairly discriminatory,” as described by the federal proposed regulations for rate review.
Earlier this week, newly elected California Insurance Commissioner Dave Jones called on Blue Shield and other large insurers to halt premium increases for at least 60 days so he can review them.