Insurer: “Something is seriously wrong” with individual health insurance market
Duke Helfand of the Los Angeles Times has yet another story in today’s issue on the enormous and unsustainable increases in California individual health insurance premiums. Helfand’s story spotlights recent rate hikes by Blue Shield of California, which according to his story have gone up 50 percent or more for about a quarter of 193,800 individual policyholders since last fall.
Blue Shield spokesman Tom Epstein defended the increases as reflecting soaring medical care costs and increased utilization of more costly services by policyholders as well as new state and federal mandates. Those cost drivers required Blue Shield’s actuaries to recalculate projected claims payouts.
Nevertheless, Epstein explained, the outgo continues to exceed premium revenue. Blue Shield expects to lose $20 million to $30 million on its individual policies this year after a loss of $27 million the previous year, he said.
“People are justifiably concerned when they get a significant rate increase. We wish that we didn’t have to do that,” Epstein told The Times. “When people are getting increases like that and we’re still losing money, something is seriously wrong.”
As Teal’C of Stargate SG-1 would say, “Indeed, O’Neill.”
If Blue Shield were a monoline carrier that sold only individual (and not group) health insurance, California Insurance Commissioner Dave Jones, piqued at Blue Shield’s rate hikes and seeking authority to allow him to approve rates before they go into effect, could have an even bigger problem on his hands: potential insolvency of the insurer.