Insurance Space

Health insurers across the country are dramatically increasing rates and slashing benefits for many of the 17 million consumers who have individual insurance policies. The issue is being addressed by the President, as he attempts to create an affordable insurance package in his overhaul of healthcare in the United States.

Anthem Blue Cross Blue Shield in California, for example, has announced a rate increase of 39 to 60%. Currently, however, consumers have very little option except to pay the increase or drop coverage as affordable options are few.

Consumers choose individual insurance policies when they are unable to obtain group insurance through an employer. Individual plans have different rates, depending upon the customer’s age, state of health, and location.

Health and Human Services Secretary Kathleen Sebelius and other members of Congress have released a report that has drawn attention to the insurance rate hikes in several states besides California, including Maine, Oregon, Michigan, and Connecticut. She criticizes the insurers saying that they are putting profits ahead of customers who must buy the individual policies.

Next week, state and federal officials will conduct public hearings into Anthem’s impending increases, which are due to take effect on May 1, 2010. Senator Dianne Feinstein of California announced Friday that she intends to introduce legislation to expand federal authority over health insurance premiums. The proposed bill would create a “Medical Insurance Rate Authority” under the Health and Human Services Secretary.

The insurance companies overall agree with the need to fix health insurance problems. They say that the rate hikes are due to factors beyond their control, such as the soaring cost of medical care and the increased turnover of customers who move to other markets due to employer contracts or unemployment. WellPoint spokesperson Brian Sassi says, “At the end of the year, when all things were said and done, premiums were insufficient to cover the claim costs that we actually paid out.”

Some insurers have actually started a strict selection process in an effort to control costs – either charging those with health conditions higher premiums or opting not to extend coverage. Some states, including New York and New Jersey, have laws against this practice and are required to sell policies to all buyers, regardless of pre-existing conditions.

Representative Henry Waxman of California, who chairs the House Energy and Commerce Committee, says “This once again underscores the need for Congress to pass a comprehensive health-care reform so that Americans have access to affordable health care and are protected from abusive insurance company practices.”

Related posts:

• Insurance rate hikes attract federal scrutiny
• People are ‘Frightened’ by Insurance Rate Hikes
• Sebelius: Reform needed to fight insurance hikes
• More interference Now Democrats target insurance premiums
• Health insurance costs break through earth orbit

Tags: Health insurance, Insurance