Saturday, February 13, 2010

Insurance rates soar in 4+ states

John Aravosis (DC), It's not just four states. These bastards are doing it nationwide. In DC, my CareFirst Blue Cross Blue Shield rates went up "only" 15% this year. Previous years were, I believe, in the 20% to 25% range per year.
Anthem Blue Cross, a subsidiary of WellPoint Inc., has been under fire for a week from regulators and politicians for notifying some of its 800,000 individual policyholders in California that it plans to raise rates by up to 39 percent March 1.
The Anthem Blue Cross plan in Maine is asking for increases of about 23 percent this year for some individual policyholders. Last year, they raised rates up to 32 percent.
Kansas had one recent case where one insurer wanting to raise most individual rates 20 percent to 30 percent was persuaded by state insurance officials to reduce the increases to 10 percent to 20 percent. The insurance department would not identify the company but said it was not Anthem.
And in Oregon, multiple insurers were granted rate hikes of 15 percent or more this year after increases of around 25 percent last year for customers who purchase individual health insurance, rather than getting it through their employer.
So, here's a problem I have with the excuse the insurance companies gave for raising rates on the individual market:
Premiums are far more volatile for individual policies than for those bought by employers and other large groups, which have bargaining clout and a sizable pool of people among which to spread risk. As more people have lost jobs, many who are healthy have decided to go without health insurance or get a bare-bones, high-deductible policy, reducing the amount of premiums insurers receive.
Yeah right. Insurance company X insures, say, 10,000 people working for Microsoft in Washington state. But, they argue, that if I work for myself in Washington state, they have to charge me a lot more money than they charge Microsoft employees because my "pool" of individual policyholders is more costly and risky than the Microsoft employees.
That's an utter bunch of crap. If they insure me in Washington state as a self-employed individual, they're not taking a massive risk that I might end up being Typhoid Mary when there's no large group to spread the risk around. There is a large group. It's called every single other person that insurance company is already covering in that state and or nationwide (if there's a parent company). All those Microsoft employees are already helping you spread the risk of having me on board. And the past ten years of BCBS insurance, when I wasn't having problems with my eyes, I helped BCBS cover other people both in the individual market and in the large group market. Money is fungible, and for Blue Cross and all the rest to pretend that their profits in one venture don't permit them to suffer potential losses, or lower profits, in another venture, is utter bs. There's no excuse for them charging different rates for essentially the same coverage.
Yet another reason I can't believe the White House and Congress blew it this past year on this issue. How hard can it be to demonize demons?

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