February 2, 2011
Blue Shield Rate Hike Not Supported By Insurer’s Filing
Consumers Union Highlights Concerns in Letter to California Insurance Commissioner
SAN FRANCISCO, CA – Blue Shield’s proposed rate hike for individual policyholders in California is not supported by the data included in its rate filing, according to a letter by Consumers Union sent to Insurance Commissioner Dave Jones. Consumers Union noted that the cost projections used by Blue Shield raised several red flags suggesting that the insurer may be exaggerating its need for the latest increase, which will be its third in six months.
“Blue Shield’s rate filing fails to make the case for its huge rate hike request,” said Sondra Roberto, staff attorney for Consumers Union. “California must conduct a thorough review and publicly identify any errors or unreasonable math used in Blue Shield’s rate calculations.”
On February 1, Commissioner Jones announced that Blue Shield had agreed to delay for 60 days its March 1, 2011 rate hikes, which would result in increases of up to 59% for some individuals insured under Blue Shield health insurance policies. Just last week, Aetna, Anthem Blue Cross, and Pacificare agreed to delay their rate increases to give Jones more time to review them.
California has a new rate transparency law in effect as of Jan. 1, 2011, that requires more data to be submitted with rate increases and requires rates to be “actuarially sound.” But California still lacks the authority to reject excessive rate increases outright. Jones is pushing to obtain that authority through new legislation.
“We need more states to delay rate increases until there are adequate review mechanisms in place that will protect consumers from unfair increases,”” said Roberto. “Many states are using federal health reform funds to improve their rate review, but they are still in the process of ramping up those efforts. And some states, like California, need additional legislative authority to help them control rising rates.
Michael McCauley – 415-431-6747, ext 126