viernes, 14 de enero de 2011

Blue Shield of California defies state insurance commissioner over rate hikes

Davejones-span












Defying California’s new insurance commissioner, Blue Shield of California has refused to delay controversial health insurance rate hikes for 60 days that prompted an uproar among customers who are seeing successive increases over the last five months of up to 59%.
The nonprofit San Francisco-based insurer said it would submit its latest increase -- effective March 1 and averaging 15% -- for review by an outside expert. It pledged to issue refunds to customers if errors are found in its paperwork.
Insurance Commissioner Dave Jones immediately condemned Blue Shield’s move, saying the company acted on its own without consulting him. Jones discounted Blue Shield's characterization of its action as “unprecedented,” noting that a new state law requires all insurance rate hikes to undergo scrutiny by outside actuaries.
Jones, however, has limited authority to stop rate increases. He can only do so in cases where an insurer spends less than 70% of premium income on healthcare expenses.
“Commissioner Jones continues to believe that a 60-day delay is an appropriate action given the fact that he had only been in office for less than 72 hours when he found out about the full impact of the rates,” the Department of Insurance said in a statement.
Blue Shield is seeking to raise rates for the third time since October, and some of its 194,000 individual policyholders were notified recently that they will get all three rate hikes at once.
On Friday, Blue Shield Chief Executive Bruce Bodaken said in a statement that the company regretted the need for “significant rate increases,” which he blamed on the “rapid increase in healthcare expenses.”
Bodaken said Blue Shield was seeking the independent review “to establish trust and confidence in our rate-setting process.” If the review finds that Blue Shield’s rates are not sound, he said, “we will hold our members harmless by refunding the difference with interest.”
The statement did not mention the 60-day delay, but a Blue Shield spokesman said the company did not intend to postpone the rate increases as requested by Jones. “We’re not doing a 60-day delay,” Tom Epstein said.

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