Health Insurance Co. Anthem Blue Cross to Raise Rates Further
California private health insurers are looking to substantially raise their rates in the coming year.
The largest for-profit insurer in California, Anthem Blue Cross, wants to raise its rates an average of 18% for roughly 630,000 individual policyholders. Aetna, the nation's third-largest health insurer, wants a 19% increase. And Blue Shield of California is expected to try raising rates next week. Health Net raised rates last month by 14%.
If Anthem goes through with their plans, some customers may have their fees raised by as much as 25% by February.
California insurance regulators are expected to review the proposed rate hikes, but they don’t have the power to regulate them. Anthem claims that its profit margin this year on its individual insurance business in California is less than 1%, and they will lose money next year. Anthem tried to raise rates as much as 39% in 2010 but backed down when consumers were furious; instead, the company accepted maximum rate increases of 20%. This year Anthem raised premiums 8% to 14%.
Californians who receive their insurance from their employers would not be affected. Two million Californians buy individual policies, but the majority of Californians are insured through employer group plans.
In an effort to give the government more control over the private insurance companies, there is a ballot measure scheduled for November 2014 that would give the California insurance commissioner the authority to approve or reject health insurance rate increases. This anti-free market measure is supported by Consumer Watchdog, the Santa Monica group that in 1988 championed Proposition 103, which enacted rate controls on property and auto policies.