The state Insurance Commission announced that Anthem has voluntarily agreed to reduce its premium increase for the individual market after the department conducted a review.
The move is estimated to save policyholders about $54 million.
The insurer had proposed an average increase of 17.9 percent, but it is now lowering that to 13.8 percent.
Insurance Commissioner Dave Jones said even with this decrease, 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."
Jones added that he appreciates the decrease.
The state's Insurance Department can review proposed rate hikes, but health insurance carriers can implement increases without approval from the insurance commissioner, who lacks the authority to reject excessive rate increases.
An Anthem spokesman said that the agreement reflects the fact that the health insurance industry continues to face rising costs.
The Associated Press contributed to this report.