Tuesday, March 22, 2011

Another Small Victory

Last week I praised the Los Angeles Times for its ongoing series of articles on the health insurance industry. By shining the light on the shady practices of those carriers in raising rates,co-pays, and deductibles, often midstream, the Times brought some pressure to bear. Today's good news is that such pressure works.

California health insurer Anthem Blue Cross, scaling back rate increases for the second time in less than a year, has agreed to cut nearly in half average increases for more than 500,000 individual policyholders.

State officials said California's largest for-profit health insurer would reduce average July 1 increases to 9.1% from 16.4%. Anthem said it also would put on hold until January plans to hike policyholders' deductibles and co-pays for medical services at the same time.

The two things which are significant in this announcement is that so many policy holders are benefited and that this is the second time in a year that Anthem Blue Cross has had to back down in trying to implement unconscionable increases. The latter is due to a combination of press coverage and diligence in the California Insurance Commissioner's office. This time the system worked, although Anthem Blue Cross is still maintaining that health care costs are rising and the company is losing money in the California individual policy market. The issue will obviously be revisited at the end of the year, if not sooner.

The system is still not right, mainly because the industry likes it that way:

[California Insurance Commissioner Dave] Jones said he was pleased with Anthem's decision, but he said that fast-rising rates remain a huge problem for Californians struggling to afford health insurance. And he renewed his call for a state law to give his office the authority to reject excessive rate hikes. "Health insurers still hold all the cards when it comes to rate increases," he said. "Consumers are at their mercy."

Until the California legislature and the rest of the state legislatures put some teeth into the insurance commissions' authority, we'll just have to rely on the press to highlight the over-reaches by the industry. Fortunately for us in California, the Los Angeles Times has been doing just that.

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