Major Calif. Health Plans Raise Premiums at Rates Outpacing Medical Costs

TOPIC ALERT:

The largest health insurers in California are raising premiums for hundreds of thousands of individual policyholders by about 8% to 14%, rates that outpace the overall cost of care, the Los Angeles Times reports.

In the last year, the overall cost of health care goods and services increased by 3.6% nationally, according to government data.

Rate Hike Details

Insurers proposing rate hikes include:

  • Anthem Blue Cross, which has proposed increasing premiums by 9.6% to 13.8% for about 700,000 individual policyholders and their family members on May 1 or July 1; and
  • Blue Shield of California, which seeks to increase premiums by 7.9% for 265,000 individual policyholders and by 8.9% for 56,000 individual policyholders on March 1.

The proposed premium hikes follow Kaiser Permanente's 9% average premium increase for about 300,000 policyholders last month.

Patient Advocates, State Officials Express Concern

Patient advocates and state officials have questioned if insurers are doing enough to keep premiums under control.

Gerald Kominski -- director of UCLA's Center for Health Policy Research -- said, "Consumers should be outraged that premiums continue to grow faster than underlying costs."

Janice Rocco -- deputy commissioner for health policy at the state Department of Insurance -- said that many health insurers "have projected significant increases in medical costs and utilization, but those projections have not been borne out by experience."

In the past, the state insurance department has disagreed with medical expense projections from Blue Shield and Aetna and convinced the insurers to lower their rate increases.

Insurers' Response

Insurers said the increases are based on their claims experience with policyholders, rather than on the broader rate of medical cost inflation.

They added that healthier people have dropped out of the individual market as rates have risen, leaving a pool of policyholders who generally have higher medical costs.

Darrel Ng -- a spokesperson for Anthem -- said Anthem will "continue to examine the fundamental issues at the heart of rising health care costs" in an effort to reduce costs while improving care quality.

Proposed Ballot Measure

Meanwhile, patient advocates and lawmakers continue to rally support for a proposed ballot measure that would give California's insurance department the authority to approve or reject rate increases (Terhune, Los Angeles Times, 2/23).

Last week, Sen. Dianne Feinstein (D-Calif.) endorsed the proposed ballot measure in an email to more than two million registered California voters. Feinstein urged voters to sign petitions in support of the measure, which needs 505,000 signatures to qualify for the November ballot (California Healthline, 2/2).

Sandra Kelly
Where is the push back from the State Insurance Commissioner. The reason Aetna cites for raising my rates another 13% is that they are now mandated to cover autism and maternity benefits in CA. How does that follow? I have High deductible insurance (all I can afford since losing my job that had benefits and no jobs now seem to offer health coverage) and, in 5 years they have NEVER had to pay a penny out of pocket (I even pay checkup and preventitive costs in full) ...but my monthly rates have now doubled. I feel powerless and furious. The nest egg I spent 35 years building is fast disappearing
Lucy Snyder
To Hatti and Carol, I say, "hear hear"! Same for me: I pay $864 a month for health ins. and have never met my deductible. Also, I am self employed and am near the point that I cannot pay this monthly amount. My risk is that I am 58 and female, just like the both of you. I've written letters to our politicians, AND NOTHING EVER GETS CHANGED. Its stressfull just to think about it. If I give up this policy, the state/gov't will end paying my emergency room visit...now who wants that? Gov Brown, Commission Jones: are you ever going to actually do anything to help people like us, who are paying more than their fair share?
Scott Zettlemoyer
Capitalism at its worst. Or is it socialized medicine that is the problem? Why should everyone pay the same in a group policy? Smoke:pay more! Obese: pay more!! Drink/drug to excess: pay/more!!! Eat animal fat to excess: pay more!!!! There is not a healthcare crisis in this country; There is a personal responsibility crisis in this country!!!!!
Bett Martinez
Thank you Hatti for understanding that insurance companies, for profit and non-, are passing through the cost of care plus administration for the WHOLE, and coming up with premiums based on this figure. Sure, there is probably fat to be found in the admin process, but cutting it out won't take care of everybody. Companies are saying it's increasing claims that are driving up the costs, with basically healthy people like yourself and Carol F above, dropping out, so only those who use coverage stay in. As a longtime broker, I'd like that data to be shared, so everyone could see it. Also, we need more transparency regarding the cost of care, outpatient and particularly inpatient. My heart breaks when a client tells me they went to emergency and had a few tests. Nothing major found, but bill was $18000. Negotiated rate of their insurance brings it down, so client pays $3800 (high deductible plans like yours), insurer $5600. Transparency please. Now helping form small groups.
Carol Frandsen
I will be paying my new higher rate for Blue Shield on the March 1. I have a $5200 deductible. I have had a few hormonal problems--nothing major--and have never met it. I will turn 50 in May and(for now) it is going up another $100! I will be forced to let it go. Therefore, accessing any serious needs(hope not) through ER or urgent care or P.Parenthood. I will not be able to afford the ER. So there you go. And you know what. Not to sound negative--but I dont care anymore! I just cant. I have called politicians, been politically active on health care, signed petitions---all until I am tired. Tired of the whole healthcare situation. And know one cares. These articles come out daily. No one that has the power to do anything, does anything. Hell. they have theirs. Right? Paid for by us working people. What has to happen to change this. Dont know anymore. I give up...for now. Single Payer and to hell with all of you who dont want it. Dont use it and keep paying your premiums.

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