California Blue Shield announces rate increases of up to 59% for individual policy holders

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Health insurer Blue Shield of California, just dropped a bomb on 193,000 policyholders, saying it will increase premiums on individual policyholders up to 59 percent on March 1, according to an article in the Los Angeles Times.

The proposed increase is startling in light of the furor created last year when another big insurer, Anthem Blue Cross, tried to increase rates in the state by 39 percent for up to 700,000 policy holders. The announcement triggered an investigation by the Department of Insurance, and was widely cited by President Obama to help garner support for his health care reform.

Anthem later backed off of its request after state regulators found substantial mistakes in the calculations provided by the company to support its proposed increases. The insurer ultimately pushed through a rate increase of 14 percent last October, and is planning another hike averaging 9.8 percent for individuals on April 1.

Blue Shield says that its increases are necessary to keep up with quickly rising health care costs, some of which resulted from the passage of the Obama administration’s health care bill. “We raise rates only when absolutely necessary to pay the accelerating cost of medical care for our members,” the nonprofit insurer wrote in a letter to customers last month.

The announced rate hike prompted a flood of complaints to newly-elected Insurance Commissioner Dave Jones.  Jones said the long-term solution to the rate-hike problem is having the Legislature empower the Department of Insurance to regulate health insurance rates, much in the same manner as they regulate car insurance.

“Blue Shield’s increases pose the same problem posed by Anthem Blue Cross last year and other health insurers as well,” Jones said in an interview. “My hope would be that Blue Shield would reexamine these rate hikes, particularly in the face of the impact they are having on individual policyholders.”

Nearly 1 in 4 customers will see their cumulative rate increased by Blue Shield over 50 percent in just five months.

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Comment (1)
  1. JoAnn Blake says:

    Wow, that is a bomb. How will policyholders afford it?

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