A U.S. senator is pointing to a $4.9 billion correction in regulatory filings by Aetna as another reason the nation needs “more transparency and accountability in the health insurance industry.”

John "Jay" Rockefeller

Sen. John “Jay” Rockefeller (D-W.Va.), chairman of the Senate Committee on Commerce, Science and Transportation, announced Dec. 8 that Aetna amended its 2008 health insurance regulatory filing in what he said was a direct result of the committee’s four-month investigation into how much of every premium dollar insurers are actually spending on patient care.

In a statement, Rockefeller said health insurers “have a duty” to provide accurate financial statements to consumers and regulators detailing how much they spend on profits, executive salaries and “on figuring out how to deny care to people when they really need it.

“Unfortunately, it looks like Aetna and other health insurers haven’t been taking this duty very seriously,” Rockefeller said. “I’m disappointed that my committee had to launch a full-scale congressional investigation to get these companies to meet their basic reporting obligations.”

Aetna, in a statement to IFAwebnews.com, is classifying the correction as “a simple mistake,” according to spokeswoman Cynthia Michener.

Committee’s inquiries

“We have alerted our staff to the errors with an emphasis on quality control to prevent this from happening again,” Michener said via e-mail.

The Senate committee’s work began in August, with Rockefeller writing letters to Aetna and other major health insurers requesting medical loss ratio data, the percentage of each premium dollar used for claims versus other expenses.

That request was followed up with another letter in November, asking CIGNA to clarify its 2008 activities in the small and large group markets, as the insurer’s filings inaccurately reported it did not conduct business in the small group market, Rockefeller said. CIGNA has informed the committee it will correctly report this business in its 2009 filing.

One month later, on Dec. 2, Aetna told the committee it amended its 2008 filing, disclosing that its larges subsidiary, Aetna Life Insurance Co., misclassified $4.9 billion in its 2008 Accident and Health Policy Experience Exhibit.

In its original filing, Rockefeller said, Aetna Life reported $6.6 billion in small-group premium, but the amended filing reclassifies $4.9 billion of those premiums as large-group premiums.

Michener said that in Aetna Life’s filing with the National Association of Insurance Commissioners in 2007, all group business was reported on the small-employer line, but a portion should have been reported on the line titled “other employer,” which includes large-group policies.

“The same mistake was made in 2008,” she said. “This filing does not affect individual states as it is a national report.”

The amended filing indicates that Aetna spend only 79% of small-business health insurance premiums on health care, 3% less than the 82% it originally reported.

Rockefeller said failing to submit accurate medical loss ratio information to state agencies is not only a violation of law, but “it also undermines the efforts of policymakers, consumer advocates, and regulators to determine whether consumers and businesses are getting a fair value for their health care premium dollars.

“This is yet another example of why we need more transparency and accountability in the health insurance industry,” the senator said.