RATE HIKES: State Becoming ‘The Wild West of Health Insurance’
Californians with individual insurance plans are bracing themselves for hefty rate increases by one of the state's largest insurance providers, according to the San Diego Union-Tribune. Blue Cross of California has announced premium hikes averaging 19%, although some communities in rural Northern California will see hikes of up to 32%. An estimated 800,000 Californians will be affected by the rate increases. Although Blue Cross spokesperson Peter O'Neill asserted, "This is our first across-the-board increase in 15 months," the move has infuriated many, including the California Medical Association, who points out the company "spends less than any major insurer on medical care, while posting the largest profit margins." The increases have "sparked consumer complaints" across the state. "We are hearing from individuals who can't afford the hikes, people who are thinking of stopping coverage," said Peter Lee, of the Center for Health Care Rights in Los Angeles.
"Sharp premium spikes" are the norm for the 2 million Californians who rely upon individual health plans; it's a market "one expert calls the 'Wild West of health insurance.'" Cost increases have driven the number of customers on individual plans down from 10.5% to 9%; the number of uninsured in the state, meanwhile, has "been rising by 50,000 monthly." The individual market is a lucrative one for insurers because they can "underwrite or evaluate the risk of each member, unlike group plans, which bring blocs of unassessed people under coverage." O'Neill maintains that while Blue Cross is committed to serving this segment, it is also a costly group, "It's very expensive to maintain individual lines. You need more customer service and more claim-processing people" (Rose, 7/20).