Blue Shield Raises Premiums in California as Much as 54%

You’d think that the insurance industry, faced with the prospect of competition from a proposed national health plan, would do everything it could right now to keep its customers happy. So why did Blue Shield raise its rates this month – as much as 54% for one policyholder – Los Angeles Times columnist David Lazarus questioned. “Blue Shield Hits Health Insurance Policyholder With 54% Rate Hike.”

Blue Shield policyholder Ruta Miller, who pays for an individual policy, received a letter from her insurer alerting her that her “rates are changing due to rising costs across the healthcare industry. Major drivers include hospital upgrades, new technologies and expensive new drugs.”

“Blue Shield could have made these claims at any point over the last 50 years,” writes Lazarus. So why now?

Company spokesman Aron Ezra blamed hospitals and said, “We agree that insurance premiums are rising far too fast — and this is symptomatic of our broken healthcare system. Our system needs an overhaul.”

But if that’s the case, why is the industry working so hard to prevent an overhaul and keep the status quo?

Miller’s increase was higher than most policyholders experienced, said insurance brokers, who said the rate increases this year run from 8% to 28%. Miller’s increase was so high because she is on the high end (even though she is healthy), apparently because she turns 45 this year, an age at which Blue Shield arbitrarily decides to increase rates for all policyholders.

People with private policies get hit hardest by insurers, explains Lazarus, because they don’t have the bargaining power of large employers to keep rates down. That’s what a government-provided healthcare would solve by creating a pool for everyone without employer-provided insurance, spreading the risk and controlling costs. But it would also allow people like Miller – millions of people, in fact – to flee big insurance rate-increase abuse for a more affordable government option.

But that hasn’t seemed to deter Blue Shield. It also begs the question: Where is the California Department of Insurance when you need them?

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