Blue Shield Ignores Commissioner's Suspension of Insurance Rate Hikes
Blue Shield is the only health insurance company in California who refuses to comply with the 90 day suspension of rate hikes which are set to take effect March 1.
Yesterday Insurance Commissioner Dave Jones announced that three of the four health insurance companies of California, Anthem Blue Cross, Aetna and PacifiCare, have all agreed to suspend insurance rate hikes for a 90 day period while a compliance review is conducted.
The temporary suspension was requested by Jones in order to allow for a review of proposed health insurance premium increases and to ensure compliance with the new federal law, which he was given the authority to enforce on Tuesday. This law requires that insurers spend 80 percent of their premiums on direct medical care. This is up from the previous law which only mandated 70 percent.
Blue Shield members could see their rates go up by as much as 59 percent starting in March. Anthem is requesting a 9.8 percent increase, Aetna 2.8 percent and PacifiCare 6.6 percent.
This is the third rate increase from Blue Shield since this fall, causing frustration among its members. In a statement released last week Blue Shield defended their serial increases stating, “Despite Blue Shield's recent rate increases, the company expects to lose $10-20 million on its individual health plan business in 2010 and another $20-30 million in 2011. Blue Shield's total costs for hospitals, physicians and prescription drugs have risen by an average of 15% annually for each of the past three years.”
Jones, who was sworn into office on January 3, asserts that he does not have the authority to block any excessive premium increases. His investigation is solely to enforce the 80 percent rule and any other “unreasonable” increases he finds will be made public on his departments website.
“I continue to be disappointed by Blue Shield's response”, Jones said, “but I will do what is within my power to determine whether Blue Shield's proposed rates are in compliance with the law and to enforce the law”.
Blue Shield, one of the largest health insurance providers in California, intends to conduct an independent review of their company's proposed premiums, which is to be completed by the March 1 deadline. “If the independent review finds that the rates are not sound, we will hold our members harmless by refunding the difference with interest,” Blue Shield promised to their members in a statement.