START A PETITION 25,136,189 members: the world's largest community for good
START A PETITION
x
1,517,826 people care about Health Policy

Health Insurer Defends 39 Percent Premium Increase

Health Insurer Defends 39 Percent Premium Increase

While the health care bills remain stalled, the problem of soaring health care costs continues. For those who are insured in the individual market, but barely hanging on, the news is grim.

Health and Human Services Secretary Kathleen Sebelius dispatched a letter to Anthem Blue Cross of California earlier this week asking for justification for the individual insurance premium increase of as much as 39 percent. The rate increase will affect as many as 800,000 Californians who currently pay for individual policies, but does not affect those with employer-based plans. These increases are up to 15 times that of inflation.

Sebelius wants Anthem to disclose to policyholders what share of their premiums is going toward profits and what share actually covers medical claims. The state of California requires a minimum of 70 percent to be spent on care, pointing out that Anthem’s corporate parent, WellPoint, saw profits rise to $2.9 billion in the fourth quarter of 2009. You can read the entire text of her letter HERE.

Although California state regulators oversee increases to make sure they are handled according to law, they have no power to control rates.

Anthem, according the The Washington Post, defended itself by saying “Costs have increased in the individual market because the recession has led many policyholders to drop their coverage, spreading expenses among a smaller pool of customers. Additionally, those remaining with the company tend to have, on average, greater health needs than those who have dropped coverage. We regret the impact this has had on our members.”

Did you get that? Cost increases cause policyholders to drop coverage, which causes prices to increase. Vicious cycle.

As someone who is hanging on by a thread in the individual market, the Washington gridlock on health care reform has me steamed. My own premium rose by 30 percent in January, after a similar increase a year ago.

Every time rates increase, more of us fall off the rolls of the insured, necessitating increases for the remaining few. It is unsustainable. How long before the option for individual policies goes the way of the dinosaur? Employer-based coverage is also shrinking, as fewer small businesses can afford to cover their employees.

While people are losing coverage and, along with it, access to care, Washington is keeping reform in the deep freeze, more concerned about the next election than with making progress.

I was thrilled to see Kathleen Sebelius take an insurer to task in such a public manner, but firing off angry letters to insurers is not going to cut it. As long as the “system” remains unchanged, we can only expect more of the same.

Read more: , , ,

Photo: http://www.hhs.gov/secretary/


have you shared this story yet?

some of the best people we know are doing it

107 comments

+ add your own
10:57AM PST on Mar 10, 2010

Hello Seth,

My sympathies for sure....been through many downturns and layoffs here, BUT this is about SHAREHOLDERS....and protection for the "UPPER" (Greedy) management...."they" will work BOTH SIDES OF THE FENCE to take care of their nest.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
It's time for ANTI TRUST LAWS for the INSURANCE CROWD!

10:03AM PST on Mar 9, 2010

Roger R,

Not to defend them (as you can see from my posts), but there have been layoffs from a number of the healthcare companies, as I can personally attest.

As with many other corporate staff reductions during the recession, I'm sure you'll see that while executive compensation has remained high in many industries, they cut staff and quality AND raise prices in order to offset their losses.

9:17AM PST on Mar 9, 2010

CUT AND PASTE THIS>>>>> http://sickforprofit.com/ceos/

NOW PLEASE EXPLAIN HOW THIS "PROFIT" IS NOTHING MORE THAN A PICKPOCKET IN TIMES SQUARE IN BROAD DAYLIGHT?

Economics works with egg beaters......not with HEALTH CARE....oh, and just what does the health care industry do, anyway? Huh? They "manage" funds...that's all....and they do a real lousy ONE WAY job of it too. All their parking lots are full...hmmm.....when to they get to lay people off in a recession, as opposed to raising rates to compensate for less policies? (or more payoffs to lobby people like you, Don J ! )

5:42AM PST on Feb 27, 2010

when you don't have a clue about economics, it's easy to get it wrong and blame profit as being evil when it has produced just about every great thing in every industry in the free world and is used by every authoritarian and dictatorial regime in the world

5:35AM PST on Feb 27, 2010

Can someone please inform the author that her assertion in paragraph 6 about paragraph 5 is not correct? She said rate increases caused people to drop from the market and the article said that increases came after healthy people dropped from the market.....if she wants to peg someone for the price increase it should be the healthy people who left the market or the governments that made the helathy people need to leave the market.....sometimes we read or hear what we want to and it not be the reality...sorry Ms. Pientrangelo, YOU'RE WRONG....if you really want to see if the insurance company is taking more profit than before, research and see if their profit MARGIN has increased to more than taking about 4 cents out of ever dollar charged for profit.....when your operating costs increase, sometimes you must charge more to make up the difference....the health insurance industry has one of the lowest profit margins in the economy.....you're bad assertions do sound quite pitiful though

2:49PM PST on Feb 20, 2010

Beverly,
It's not just the insurance companies that are raising rates. If you have been to the doctor or hospital lately, you will find that providers have also raised their rates tremendously. With medical costs going up and less people paying insurance premiums that help cover the costs of insurance payouts, insurance companies have no choice but to increase premiums. Insurance profits may seem high, but some of those profits are needed to keep their government required reserve fund at the required level to cover rising medical costs and unanticipated large payout claims.

7:25PM PST on Feb 19, 2010

The opportunistic "dance" which the insurance industry/insurance companies foster(s) (of economic recession, people losing jobs, businesses having to cut back on or eliminate providing medical benefits to the employees -EQUALS- the insurance industry/insurance companies raising their rates) is appalling, wrong, and disasterous for the people who are not wealthy, for the strength of our middle economic class, and for the strength of our nation. It is beyond belief that individuals (human beings) who run any insurance company (with the "profit" insurance companies make) would choose to raise rates 39%. This is both inhumane in its affect on fellow citizens and shows those insurance individuals have no love of or loyalty toward our nation.

11:38PM PST on Feb 17, 2010

As one of the beleagueredly insured, I am outraged at the hubris of Anthem to raise the rates of those of us who are struggling to survive and struggling to pay our premiums. Because others have lost the battle and given up their insurance, we must now accept another increase? A 39% increase? Why? This cycle of extortion to maintain profit must end! Join us and just say no! to the 39% increase!
http://www.thepetitionsite.com/1/no-to-39-anthem-increase

8:51AM PST on Feb 16, 2010

Another example of teh deep national tragedy and shame that is how such a wealthy and educated nation could be so behind in provifding a basic necessity for its citizens!

9:13AM PST on Feb 15, 2010

In Michigan, we are faced with the same dilemma. The attorney general fought for months against Blue Cross Blue Shield's proposed increase of 52% for those with individual plans. After much negotiating, the increase was publicized at 34%. Howewer, when my new bill arrived, the increase was well over that. I called the attorney general's office and was told I was "lucky" because most people calling in had received a 41% increase. The 34% increase that was on the local news and in the paper was just a "recommendation". My monthly rate is $691.00, no dental/vision/prescription/mental health/women's exam/physical exam coverage. This is for one person. Office visits are covered at 50%, unless it is considered a consultaion (i.e. "specialist"), that is not covered. The Blues also is reported to have purchased a for-profit health care/physical therapy business. They are in no way the non-profit "insurer of last resort" that they claim to be. Why should anyone care?? Well, if you lose your job, or are self employed and purchase your own insurance (not part of a "group plan"), it can effect you. The attorney general reported that his own parents were also victim to another one of their scams, when BCBS did not inform them of the less expensive/more coverage medigap plan they were entitled to. This happens to many seniors. Ultimately, we ALL pay the costs of this fraud.

add your comment



Disclaimer: The views expressed above are solely those of the author and may not reflect those of
Care2, Inc., its employees or advertisers.

ads keep care2 free

Recent Comments from Causes

Try telling that garbage to an Australian,particularly a Queenslander, where the vermin are illegal to…

I like rabbit meat. It's kind of hard to find, so thanks for the heads-up! It's terrific in a paella.…

meet our writers

Julie M. Rodriguez Julie M. Rodriguez is an arts, green living, and political writer based in San Mateo, CA. Her work... more
Story idea? Want to blog? Contact the editors!
ads keep care2 free

more from causes




Select names from your address book   |   Help
   

We hate spam. We do not sell or share the email addresses you provide.