INSURANCE RATES: Soaring Premiums Anticipated
After enjoying low premiums through much of the 1990s, Californians are bracing for double-digit hikes next year, in part due to increased prescription drug prices, higher use of services and an aging population, the San Diego Union-Tribune reports. "We can easily expect three years of sizable increases," said E. Richard Brown, director of the Center for Health Policy Research at the University of California-Los Angeles. At the same time, Brown said, HMOs are "reluctant to cut off access to care because they are experiencing rebellions." Kaiser Permanente has said members should expect more than a 10% increase, while Aetna/U.S. Healthcare and Cigna Health Care are planning 5% to 8% increases. Consumers should view the upcoming hikes in context, said California Association of Health President Walter Zelman, who noted that the rates are jumping now after holding steady for five years. California consumers "continue to get quality health here at a price that is better than anywhere else in the country," he said. One issue facing managed care is that much of the retooling to trim costs has already been done, said Anne Anderson of Atlantis Investment. "Everybody was offloading risk to the next person down the chain. The premium hikes will be higher than many people think and it will be longer than for a single year," she predicted. Some consumer advocates, however, charge that HMOs failed in their much-touted goal of providing quality health care. Others contend that they artificially held down premiums through much of the 1990s to lure new members. "There was predatory pricing," said California Nurses Association spokesperson Charles Idelson. "We said it at the time. We said Kaiser made a strategic decision to reduce rates to increase market share," he said (Rose, 6/22).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.