Background
On Oct. 1, 2010, Blue Shield imposed rate hikes averaging 19% and as high as 29% for some individual policyholders.
On Jan. 1, the health plan adjusted its rates again in response to requirements under the federal health reform law and a new state law prohibiting insurers from charging different rates based on gender. The adjustment lowered premiums for some policyholders and raised rates for others.
Blue Shield initially scheduled a third rate hike to take effect on March 1. However, the insurer delayed its plans for two months after Insurance Commissioner Dave Jones (D) requested time to review the filings.
Rate Hike Details
If the third rate hike takes effect as planned on May 1, about 45,500 of Blue Shield’s 193,800 individual policyholders would face cumulative rate hikes of at least 50%. Of those, about 900 individual policyholders would see their premiums rise by at least 80% cumulatively, according to Blue Shield.
The health plan said only four policyholders will face the largest cumulative premium increase of 86.5%.
Blue Shield Outlines Reasons for Rate Hikes
According to Blue Shield, the rate hikes stem from escalating health care costs and greater use of expensive medical services. New state and federal requirements also have played a role in the increases, the health plan said.
Tom Epstein, spokesperson for Blue Shield, said the insurer previously had underpriced some individual health plans, leaving it unable to cover the cost of care for some policyholders.
Epstein added that the insurer lost $27 million on individual policies last year and expects to lose between $20 million and $30 million this year (Helfand, Los Angeles Times, 3/12).