Blue Shield Life and Health is imposing an unreasonable rate increase on over 80,000 Californians with individual health insurance policies, an average of 9.8% that adds up to a 22.8% increase for the year. California Insurance Commissioner Dave Jones announced today that the company would not budge on its excessive rate hike.
Working with an independent actuary, AIS Risk Consultants, the nonprofit, nonpartisan Consumer Watchdog analyzed the data in Blue Shield's rate filing and found that the company's projections of future health costs were too high, its planned administrative costs were excessive, and that the insurer had failed to provide data to back up many of its assumptions.
The U.S. Centers for Medicare and Medicaid Services released new data yesterday that showed health care spending growth slowed in 2012 for the fourth year in a row, to less than 4%.
"Blue Shield has made overblown projections of health care costs and padded its overhead to impose higher rates that cannot be justified, even as health care cost growth continues to hit record lows," said Carmen Balber, Executive Director with Consumer Watchdog. "Unfortunately California's insurance commissioner, unlike those in 35 other states, has no power to stop insurers from overcharging consumers."
This is not the first time Blue Shield Life and Health has imposed an excessive rate increase on consumers, nor is it the first time that the company has been penalized for excessive administrative costs. In March of 2013, Blue Shield Life and Health raised rates as much as 19.9% on 268,000 Californians, an increase that the insurance commissioner also found to be unreasonable.
