Blue Shield Pursues Rate Hikes of Up to 59% for Individual Plans
Blue Shield of California is pursuing a series of successive rate hikes that could total as much as 59% for policyholders in the individual insurance market, the Los Angeles Times reports.
Blue Shield said a total of 193,000 individual policyholders could see increases averaging between 30% and 35% as a result of three separate rate hikes since October.
Rate Hike Details
Tom Epstein, a spokesperson for Blue Shield, said the insurer imposed premium increases averaging 18% and as high as 29% on Oct. 1, 2010.
Blue Shield raised rates again on Jan. 1. On March 1, Blue Shield plans to impose a third round of rate increases averaging 6.5% and as high as 18%.
Epstein said most affected policyholders are receiving separate notices about the rate hikes, while some members will see all of the increases enacted together on March 1. Nearly one in four of the affected members are expected to see cumulative increases of more than 50% over the five month-period.
Blue Shield's latest rate increase will not affect 78,000 individual policyholders whose insurance is regulated by the state Department of Managed Health Care. Such members have seen two rate hikes averaging a total of 37% since October, Epstein said.
Reasons for Increases
According to Epstein, Blue Shield is raising rates in part because of the federal health reform law and a new state law prohibiting insurers from charging women higher premiums than men.
Epstein said that hospital expenses, physicians' bills and prescription drug prices also are contributing to rising health coverage costs.
Blue Shield's proposed rate increases have led many consumers to file complaints with California's new Insurance Commissioner Dave Jones (D). The commissioner's office said it is reviewing the insurer's proposed March 1 rate increases (Helfand, Los Angeles Times, 1/5).
Jones said Blue Shield's actions show that the Legislature should enable his office to regulate the health insurance industry in the same way that it regulates automobile coverage (AP/San Francisco Chronicle, 1/5).
Currently, the insurance commissioner has the authority to block health insurance rate increases only if insurers spend less than 70% of premium revenue on medical claims (Los Angeles Times, 1/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.