SACRAMENTO, Calif. (AP) -- California's insurance watchdog said Thursday that Anthem Blue Cross has agreed to reduce its rate increase for 630,000 policyholders.
Insurance Commissioner Dave Jones announced Anthem has voluntarily agreed to reduce its premium increase for the individual market after his department conducted a review.
Jones estimated the move will save policyholders $54 million.
The insurer had proposed an average increase of 17.9 percent, but is now reducing that to 13.8 percent. The rate increase was effective Feb. 1.
Jones lauded Anthem's move as health insurance premiums continue to soar. Even with this decrease, Jones said Anthem policyholders still experienced an average 22 percent rate increase in the previous 12 months.
"Health insurance has become unaffordable for far too many Californians," Jones said in a written statement. "The department thoroughly reviewed the rate filing and then I asked Anthem Blue Cross to lower their rates.
"I appreciate that Anthem Blue Cross has agreed to lower these rates so policyholders will pay $54 million less than they otherwise would have," Jones added.
While the state's Insurance Department reviews proposed rate increases, health insurance carriers can implement increases without approval from the insurance commissioner, who lacks the authority to reject excessive rate increases.
Darrel Ng, a spokesman for Anthem, said Thursday that the agreement reflects the fact that the health insurance industry continues to face rising costs.