Blue Shield of California wants 59 percent rate hike

A woman in costume at an anti-Blue Shield demonstration.

Blue Shield of California's insurance premium hike is driving Golden Staters batty. (Photo Credit: CC BY-SA/rstephemi/Flickr)

Health insurance premiums have been out of control for years, but apparently someone forgot to send Blue Shield of California the memo. The Los Angeles Times reports that Blue Shield has shocked California policyholders with a proposal to institute insurance premium hikes as high as 59 percent on March 1. The change would affect tens of thousands of customers.

Did Blue Shield of California see the Blue Cross ruling?

Californians hope that Blue Shield of California will learn from history. Less than a year ago, Anthem Blue Cross reportedly tried to make a 39 percent rake hike for 700,000 Californians stick, but the measure failed to pass. Yet the costs of health care continue to rise, and the corruption of over-billing is alive and well.

“We raise rates only when absolutely necessary to pay the accelerating cost of medical care for our members,” said a Blue Shield of California representative.

The average insurance rate hike would be between 30 and 35 percent

While a 59 percent insurance premium hike seems dramatic, the average increase for the approximately 193,000 Blue Shield of California customers would be somewhere between 30 and 35 percent. However, one in four customers would be affected by a 50-plus percent increase over the next five months.

Newly elected state Insurance Commissioner Dave Jones expects to be tested early, thanks to the proposed Blue Shield of California premium increases.

“Blue Shield’s increases poses the same problem posed by Anthem Blue Cross last year and other health insurers as well,” said Jones. “My hope would be that Blue Shield would re-examine these rate hikes, particularly in the face of the impact they are having on individual policyholders.”

Creative accounting

Even if Blue Shield of California’s health insurance premium hikes go into effect, success will not be immediate. In fact, Blue Shield spokesman Tom Epstein said the company will lose “tens of millions of dollars on individual business” in 2011.


Los Angeles Times

Blue Shield needs more money to make commercials like this

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