Individual Premiums on the Rise 39% in Calif.

Insuring Resources Commentary:
The article below illustrates whats at stake for individuals in the insurance market if they don't have access to group coverage. For instance, if I did my insurance writing for AHIP full time my health insurance would cost me $1,000 / mo for family coverage and I'd have a $5,000 annual deductible. That's a best case scenario.

For those of you who "enjoy" group health coverage through your employer hopefully this article provides a bit of perspective.


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Anthem raises Californian's individual health insurance preiums 39% for 2010LA Times 2/11/2010

The prospects for healthcare reform legislation in Washington are cloudy, but Anthem Blue Cross apparently isn't taking any chances. The company recently informed many of the approximately 800,000 Californians who buy its individual policies that premiums will rise sharply March 1. Although Anthem provided no details, insurance brokers say they're already seeing increases of up to 39%. That's on top of even larger rate hikes last year. With the pending healthcare bills proposing new limits on premiums and profits, the Anthem increases look suspiciously like an attempt to extract as much as possible from customers before the rules change.

The response from state and federal regulators was swift and heartening. California Insurance Commissioner Steve Poizner, who can't regulate rates directly but can limit insurers' profit margins, announced that he was hiring an independent actuary to scrutinize the planned increase. The House Energy and Commerce Committee and Health and Human Services Secretary Kathleen Sebelius also launched inquiries. To truly protect consumers, though, Congress should pass a healthcare reform bill that makes it easier for people to switch insurers without sacrificing coverage.

Anthem's official explanation for the hikes is that rapid increases in the cost of treatments and greater demand for healthcare services are driving up expenses at an "unprecedented" rate. It also asserts that the recession has prompted many healthy people to give up their insurance, leaving fewer policyholders to cover the cost of caring for a sicklier group. Those are valid complaints, but they don't automatically justify jacking rates up to the roof. In fact, Anthem's rate increases are contributing to the problem by pricing younger, healthier people out of the market for individual policies.

The company has called on Congress to start over on healthcare reform, rather than trying to improve on the bills passed by the House and Senate. In particular, Chief Executive Angela Braly of WellPoint Inc., Anthem's parent company, recently told the Wall Street Journal that lawmakers should find more effective ways to prod healthy people to buy insurance, promote competition among healthcare providers and put the brakes on rising costs. Those are all worthy aims, and the pending healthcare bills could be improved on all three fronts.

But the bills do make important changes in those areas -- and others as well. They would bar insurance companies from cherry-picking customers and denying coverage for preexisting conditions, enabling people to switch insurers easily. The bills also would promote competition and clarity in pricing through a new marketplace for individual policies. Anthem's actions offer the best argument yet for Congress to complete work on a comprehensive bill without delay.