Blue Shield of California looking to raise rates
SAN FRANCISCO, CA (KGO) -- Another major health insurance rate increase could be on the way for hundreds of thousands of people in California.
Some individuals' premiums would increase as much as 59 percent. On average, most would get hit with a 30-35 percent increase. The state is promising to fight back against Blue Shield's proposal.
He has been on the job less than a week and already state Insurance Commissioner Dave Jones has had to play hard ball with Blue Shield, which just told nearly 200,000 California customers with individual health policies their rates are going up as much as 59 percent as of March 1.
"I have asked that the company postpone its rate increase 60 days in order to afford me the opportunity to fully review the proposed rate increase," Jones said.
The move comes less than a year after, Anthem Blue Cross tried but failed to get a 39 percent rate increase.
Blue Shield says its rate hike averages about 33 percent, but it would be their third rate hike since October.
San Diego resident Michael Fraser, who does not have insurance from his job, is seeing his monthly premium jump from $271 a month to $431 -- a 59 percent increase.
"It's really devastating, I don't know what to do, I'm seriously considering cancelling my insurance and taking my chances, I'm 53 years old, and that's scary," Fraser said.
Blue Shield says medical costs for the individual market are rising rapidly, a trend the industry echoes.
"They've been increasing and people, particularly people who buy insurance individually don't belong to a big pool of people like group health insurance," California Association of Health Plans spokesperson Patrick Johnston said. "So when costs go up, they have to pay those costs in the form of higher premiums."
In a statement, the health insurer says even with these rate increases, Blue Shield of California expects to lose tens of millions of dollars on its individual healthcare business in both 2010 and 2011.
There have been numerous attempts at the state legislature to cap health insurance hikes, but they had been vetoed by former Gov. Arnold Schwarzenegger.
The insurance commissioner has no authority to regulate health plans rates like he can with auto insurance.
"We need to take the next step which is to have real regulation and authority to deny unreasonable and unjustified rate increases," health care advocate Anthony Wright said.
blue shield, health care, health insurance, business, nannette miranda
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