After Blue Shield shocked the nation with 59% premium hikes in California last week, the company just refused a request from the elected insurance commissioner to stop the increases for 60 days.
After Blue Shield shocked the nation with 59% premium hikes in California last week, the company just refused a request from the elected insurance commissioner to stop the increases for 60 days.
Blue Shield is making the case for tough premium regulation, because is has proven that it has the power to raise rates as much as it wants at will and refuse even a modest request from the elected insurance commissioner.
After spending the day walking the halls at the state Capitol in Sacramento yesterday, I can tell you Blue Shield made a big mistake when it decided to price gouge its customers. The state legislature is ready for a fight to give the insurance commissioner power to approve or to deny health insurance premium increases before they take effect. (You can help give them the push they need by sending an email to your state representatives today.) If that fight fails, Consumer Watchdog will help the voters decide through a ballot measure whether government should have the power to regulate and roll back excessive premiums.
Blue Shield made an offer in an errant press release it later recalled which no regulator or policyholder can accept. The company said it would let an independent actuary decide rate justification, and decided to live by the policy when news broke. The problem is that in the absence of legislated standards for what is an excessive premium, an independent actuary has no basis for review of the premium's reasonableness other than whether there is an error in addition, multiplication or subtraction.
Questions abound about how Blue Shield can justify its 59% premium hike other than by the means it seeks — an actuary to say all the math is good. The standard Californians deserve is that the rates are not excessive or discriminatory. That's the standard for the prior approval of auto and homeowner insurance rates in California that are rejected or accepted by our elected insurance commissioner. The standard saved drivers $62 billion on their auto insurance according to the Consumer Federation of America.
Blue Shield is more opaque than any health insurance company in California because of its unique tax status. We don't know how much the CEO makes, nor can we adequately see the company's the books since it is neither publicly traded nor a tax exempt charity that must make its tax returns public. Suspicion is Blue Shield cooked its books, and hid big sums of money, to justify the 59% increase.
Only subpoenas and special investigative hearings will determine the truth in the absence of new authority given to the elected insurance commissioner Dave Jones. Legislation by Assembly Member Feuer will give the commissioner that power and it is precisely what Blue Shield's second PR problem in two weeks sought to derail. Once again, Blue Shield has made the case for exactly the tough regulation it seeks to stop.
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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.
Very much appreciate the content of your post: it spotlights the inhumane greed that drives the health insurance industry with the twist that BS of CA has a former philosophy student/instructor who is CEO and who apparently skipped anything and everything on ethics. Important here is remembering that the connotation of “non-profit” is not one of less greed but one that is tantamount to the inhumane greed identical to any gone public for profit. Yes, who do the executive lackeys report to? Out of state corporate monoliths that straddle our sad land in many guises.
At same time, I do not share your optimism that there is enough anger and outrage in the capitol over how Californians once again are about to be further eviscerated by this hike. Would like more evidence or signs they overall have not been as usual bribed into turning their whorish heads. Your own doubts come through in this intro clause: “If that fight fails….”
We should fine Blue SHield or remove their right to do business in California effective 2012.
Blue Shield is going to rue the day they tangled with our boy Dave. Go get ’em, Commissioner!
Just sent my emails–though, honestly, I didn’t have much fear my reps would support this. Still, it’s always good to let them know.
We need to get to Single Payer sooner, rather than later. Maybe this is apart of the death spiral the health insurance companies are going through because they know in some of the liberal (blue states) its very likely they’ll loose the right to offer insurance.
I said this before and you keep this in mind as we go forward. Vermont is readying a plan to go Single Payer when then the Federal Health Care law goes into effect in 2012. Blue Cross has already stepped up to be the provider of the Single Payer system for Vermont.
Unless we wanna pay for an entire new branch of regional government its likely and I said this before that California with its Single Payer system will partner with Kaiser as they are already the largest health care provider in the State and will want service the Single Payer system in California which will be the largest in the country.
Kaiser will want to use that is a promotional tool to setup other states if they make the largest state controlled single payer health care system run smooth as butter.
So in a way we should do it just so we can monitor corp behavior as a Government contractor.