Calif. Commissioner Asks Blue Shield to Delay Rate Increases

January 7, 2011

California Insurance Commissioner Dave Jones has called on Blue Shield of California to delay its implementation of a new round of substantial individual health insurance premium increases that would impact tens of thousands of California policyholders. In some instances, consumers would see their health insurance rates skyrocket by up to 59 percent, the state Department of Insurance said.

The insurer is seeking rate hikes that would mean a cumulative increase averaging more than 30 percent over a five-month span for nearly 200,000 policy holders, according to Associated Press reports.

The latest hike was set to take effect March 1 pending approval from California regulators, to go with other increases that took place Oct. 1 and Jan. 1, the Los Angeles Times reported.

Some 193,000 policyholders would see increases averaging 30 percent to 35 percent if the new increase is approved.

“I find it stunning that Blue Shield would seek to impose such massive premium increases on policyholders during these troubling economic times,” Jones said. “These premium increases will impose significant financial burdens on struggling families and, in some cases, will lead to the loss of health care coverage altogether.”

Commissioner Jones also sent a letter calling on Blue Shield to refrain from moving forward with its rate increase for at least 60 days beyond the insurer’s proposed March 1, 2011 effective date. Under current California law, the Insurance Commissioner does not have the authority to reject excessive premium increases; however, by asking Blue Shield for a delay in the implementation of its plan, he hopes to have the opportunity to ensure that all proposed increases have been thoroughly reviewed.

The San Francisco-based insurer blames the new rates on rising health care costs.

“We raise rates only when absolutely necessary to pay the accelerating cost of medical care for our members,” the company told customers last month.

The Associated Press contributed to this article.

Topics California Trends Pricing Trends Policyholder

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