PREMERA: WA’s Largest Individual Insurer Pulls Plan
"In a move likely to have an enormous effect on the market for individual health insurance," Premera Blue Cross will close its doors to new applicants, it announced Tuesday. The Puget Sound Business Journal reports that the company accounts for 60% of the market for individual policy holders in Washington state, and predicts that the action could trigger similar moves by the remaining two carriers in the area -- Regence BlueShield and Group Health Cooperative. Premera representatives asserted that the decision comes in the wake of a 30% enrollment drop since 1997 and losses of $70 million over the past four years. Trae Andersen, Premera's senior vice president, attributed the slide to state regulations that allow individuals to purchase and drop coverage at will, charging, "That's like waiting to see flames engulfing the house before you buy fire insurance." Andersen predicted that without legislative change, "rates will continue to rise, enrollment will continue to shrink and insurers will continue to question their ability to remain in the market." Diane Stollenwerk, government affairs director at Sisters of Providence Health System, agreed, urging state lawmakers to remedy the situation in order to curb rising costs and ensure coverage availability. Regence Blue Cross spokesperson Steve Eaton said, "We're evaluating what impact this will have. We've consistently said that we cannot continue to lose millions of dollars each year on individual plans" (Neurath, 11/30).
In a strongly worded letter to the Tacoma News Tribune, Hugh Hendrickson, president of the Washington Association of Health Underwriters, responds to Insurance Commissioner spokesperson Robert Harkins' assertion that Premera "underpriced its policies in an attempt to get more customers." He counters, "Insuring more Washington residents is not some malevolent scheme. ... How dare the commissioner's office twist the motivations of a company that stayed in an extraordinarily difficult market when almost everyone else is long gone." In fact, he charges, the agency "has a primary duty to see that rates are neither too high nor too low in order to protect solvency of the carrier and integrity of the marketplace. Mr. Harkins' statement is tantamount to admission of failure" (11/30).