Friday, March 11, 2011

They're Back

Los Angeles Times business columnist David Lazarus took a look at the latest insurance company scam in today's column. It has to do with deductibles and with Anthem/Blue Cross. The news is not good.

...if you bought a health insurance policy with a deductible so attractive it's part of the plan's name — such as Anthem Blue Cross' Individual PPO 500 plan — you'd expect that $500 deductible to be basically set in stone.

But Anthem is notifying many individual policyholders that their plan's deductible is going up May 1. The deductible for the Individual PPO Share 500 plan will now be $550. The Individual PPO Share 1000 plan will have a $1,150 deductible. The Individual PPO Share 1500 plan will have a $1,750 deductible. ...

Peggy Hinz, an Anthem spokeswoman, said the changes were reviewed by state regulators. "It is important to note that adjusting benefits is not a breach of contract and can help keep premiums down," she said.

That's news to Culver City resident Mindy Berman. Not only is the deductible for her Individual PPO Share 1500 plan going up but so is her monthly premium — jumping 24% to $643 from $519.

So...the company sells a plan to consumers touting the deductible, buries the fact that the company is free to raise that deductible in the policy's fine print, and then adds a premium increase on top, like a cherry. Good job, that. Of course, this means that the consumer is now paying more for less healthcare. All part of the bargain, eh?

David Lazarus finds the flaw appalling.

What's especially troubling in the case of Anthem's deductible increase is the idea that a plan can be marketed with a relatively low deductible as its chief selling point, and then that deductible can still be jacked up after a consumer has signed on.

Maybe that's splitting hairs. Maybe insurers are free to do whatever they want.

That appears to be the case, David. While the California Insurance Commissioner is going to take a long hard look at the move from the standpoint of false advertising, of "bait-and-switch" tactics, it's clear that Anthem believes it's on firm ground on this one.

Sadly, the company will probably get away with it. You see, we have no alternative any more.

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