Anthem Blue Cross of California is going ahead with a rate hike that has been declared “unreasonable” by a California regulator. State regulators can review proposed insurance rate increases, but can do nothing to prevent them from happening. This increase has got to be frustrating and problematic for Anthem’s policyholders.
In April of 2011, Anthem Blue Cross of California announced that they were planning on increasing the premiums on several of their individual health insurance policies. The policies that are about to become more expensive are ones that were specifically named in such a way as to emphasize the amount of the deductible that the plan required. One could reasonably assume that people bought the health insurance because they believed that the deductible would not change. Most people find it very difficult to be able to afford health insurance, so the amount of the deductible that one would have to pay out of pocket before coverage kicks in is extremely important.
As of May 1, 2011, people who bought the Anthem Blue Cross Individual PPO 500 Plan would see their deductibles increase from $500 to $550. Those who have the Anthem Blue Cross Individual PPO Share 1000 plan were paying $1,000 as a deductible, but will soon be paying $1,150 instead. Consumers who purchased the Anthem Blue Cross Individual PPO Share 1500 plan will see their deductible increase from $1,500 to $1,700. One can also reasonably assume that this change is going to frustrate policyholders.
Officials at the Department of Managed Health Care were allowed to review this rate increase, thanks to a new California law. They have called this increase “unreasonable” under the standards set by the new rate review law. Unfortunately, regulators do not actually have any authority to stop insurance companies like Anthem Blue Cross from imposing unreasonable rate increases on their customers. There is a bill that is under consideration that would grant that authority to State regulators, but it hasn’t been passed as a law at this time.
In short, people who currently have purchased these types of health insurance policies from Anthem Blue Cross are stuck. They can either come up with the extra money for the deductible, or cancel the policy if they can no longer afford it. Consumer advocates are angry at the regulators for failing to win concessions that would prevent this rate increase, and at Anthem for going ahead with it.
Anthem Blue Cross, on the other hand, says that an independent actuary reviewed the rate increases, and described them as “not unreasonable or unjustified”. It is worth noting that, in addition to the increase on deductibles, Anthem Blue Cross will also be raising their premiums by an average of 9.1%. Originally, the insurer wanted to raise premiums by 16.4%, but didn’t go ahead with that amount after being publicly assailed about it by Insurance Commissioner Dave Jones. Around 120,000 people are going to be affected by this rate hike.
Image by austindkeyscouter on Flickr