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Keeping an Eye on Insurance Rate Hikes
Trudy Lieberman | July 29, 2010
State insurance regulators who basically decide what we all pay for our health coverage are not known for being super-transparent.' Actually, it's just the opposite.' Last week, though, the California Department of Insurance went on the offensive, setting up a new service to alert the state's consumers when their carriers have filed for changes in premium rates, up or down.
That means if WellPoint, the state's mega-insurer, tells regulators it wants another increase for the policies it sells to individuals, those policyholders will be among the first to know about them.' All consumers have to do is sign up here for an e-mail alert that will tell them what their carriers are requesting.' 'We want as many people as possible scouring these rate filings to ensure they are mistake-free,' says California Insurance Commissioner Steve Poizner.
While there may not be much consumers can do (short of canceling their coverage) if, say, WellPoint asks for another 39 percent increase, they can act as important sentinels for what's happening in the marketplace.' Last spring it was consumer outrage that alerted the press and the politicians in Washington that the rate requests were too high for them to pay.' L'affaire WellPoint sparked a national backlash against the insurer that helped push the health reform bill to the finish line. And in California, it invited further scrutiny of their rates that resulted in the carrier withdrawing its request and going back to its computer models for a redo. Regulators found that the company had made mistakes in calculating its rates.' Earlier this month, Anthem Blue Cross, a WellPoint subsidiary, filled new rates in California calling for increases of up to 20 percent for individual plans although on one insurance policy the rate increase might be closer to 25 percent.' The new increase will affect about 600,000 people who have individual policies.
To review:' These are the policies people buy on their own when they don't have coverage from the government or employers.' Premiums are high and companies may still turn down applicants who have pre-existing health conditions. That will change in 2014, but for now sick people may be out of luck. Rate hikes of any size are important because those in the individual market have to shoulder the increase themselves; there's no one sharing the premium cost. ' ' A monthly increase of $300 hurts the pocketbook, as one Californian found out when Anthem raised his rate when he turned 50.' Companies are allowed to factor age into their premiums and will be able to do that even when health reform takes effect.
I hope lots of folks in California sign up for the new e-mail alert service and that regulators in other states follow California's lead.' In some states, consumers cannot challenge rate increases through the regular hearing and appeals process.' California's move gives them a voice in the process.
More Blog Posts by Trudy Lieberman
Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website, CJR.org, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.
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