Share of Cost: First, do no harm to the bottom line
California customers of health insurer Blue Shield should brace themselves for more sticker shock — the independent non-profit licensee of the national Blue Cross/Blue Shield association is planning to raise premiums by nearly 60 percent for some customers effective March 1. According to Duke Hefland of the Los Angeles Times, the company said 193,000 customers would see increases of 30 to 35 percent, but Hefland quotes one San Diego man saying his monthly premium is set to leap 59 percent — from $271 to $431.
Almost 25 percent of customers will see increases of over 50 percent over a four-month period.
The news comes a year after for-profit Anthem Blue Cross attempted to hike premiums for its 700,000 customers with individual plans by an average 39 percent just as the health care reform bill seemed heading for certain defeat. After flaws were found in Anthem’s rate increase petition by state regulators, the company settled for increases of about 20 percent.
A Blue Shield of California spokesman said the rate hikes are necessary to cover fast-rising health care costs and to absorb expenses required under the health reform law.
Newly elected state Insurance Commissioner Dave Jones, a Democrat who replaced Republican Steve Poizner, said his only point of leverage is if Blue Shield does not meet the state’s requirements that not less than 70 percent of the insurers’ revenue from premiums be used to pay actual medical claims. If Blue Shield meets that threshold, Jones’ hands are tied.
Jones said it would take legislative action to grant him the kind of regulatory authority to oversee health insurers that his office already has over automobile insurers (another area where insurers in California have tried to introduce substantial increases with little warning).
Meanwhile, Anthem Blue Cross has applied for a 9.8 percent increase effective April 1st on top of a 14 percent jump that it imposed in October.
