California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Major Calif. Health Plans Raise Premiums at Rates Outpacing Medical Costs

The largest health insurers in California are raising premiums for hundreds of thousands of individual policyholders by about 8% to 14%, rates that outpace the overall cost of care, the Los Angeles Times reports.

In the last year, the overall cost of health care goods and services increased by 3.6% nationally, according to government data.

Rate Hike Details

Insurers proposing rate hikes include:

  • Anthem Blue Cross, which has proposed increasing premiums by 9.6% to 13.8% for about 700,000 individual policyholders and their family members on May 1 or July 1; and
  • Blue Shield of California, which seeks to increase premiums by 7.9% for 265,000 individual policyholders and by 8.9% for 56,000 individual policyholders on March 1.

The proposed premium hikes follow Kaiser Permanente's 9% average premium increase for about 300,000 policyholders last month.

Patient Advocates, State Officials Express Concern

Patient advocates and state officials have questioned if insurers are doing enough to keep premiums under control.

Gerald Kominski -- director of UCLA's Center for Health Policy Research -- said, "Consumers should be outraged that premiums continue to grow faster than underlying costs."

Janice Rocco -- deputy commissioner for health policy at the state Department of Insurance -- said that many health insurers "have projected significant increases in medical costs and utilization, but those projections have not been borne out by experience."

In the past, the state insurance department has disagreed with medical expense projections from Blue Shield and Aetna and convinced the insurers to lower their rate increases.

Insurers' Response

Insurers said the increases are based on their claims experience with policyholders, rather than on the broader rate of medical cost inflation.

They added that healthier people have dropped out of the individual market as rates have risen, leaving a pool of policyholders who generally have higher medical costs.

Darrel Ng -- a spokesperson for Anthem -- said Anthem will "continue to examine the fundamental issues at the heart of rising health care costs" in an effort to reduce costs while improving care quality.

Proposed Ballot Measure

Meanwhile, patient advocates and lawmakers continue to rally support for a proposed ballot measure that would give California's insurance department the authority to approve or reject rate increases (Terhune, Los Angeles Times, 2/23).

Last week, Sen. Dianne Feinstein (D-Calif.) endorsed the proposed ballot measure in an email to more than two million registered California voters. Feinstein urged voters to sign petitions in support of the measure, which needs 505,000 signatures to qualify for the November ballot (California Healthline, 2/2).

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