Health insurance rates continue to grow in California
Health insurance rates continue to climb in California, a fact that has the state’s Insurance Commissioner, Dave Jones, somewhat upset. Rates have been climbing at a rapid pace since 2010, after the Affordable Care Act was passed. In 2012, the federal law was upheld by the U.S. Supreme Court, which spurred many insurers to raise rates dramatically throughout the country. Insurance regulators have managed to keep some rate increases at bay, but California consumers continue to see the cost of their health insurance coverage grow.
Commissioner targets Blue Shield
Insurance Commissioner Dave Jones has set his sights on Blue Shield of California for the recent rate hikes that the insurer has issued throughout the state. Jones claims that these rate hikes are “unreasonable,” a sentiment that the health insurance company does not share. This week, Jones will be speaking out about the rate increases coming from the insurer, which will be an average of 19.9% throughout the state. The rate increase is expected to affect 268,000 consumers.
Regulators lack authority to reject rate increases
California regulators have been at odds with health insurance companies over the past two years. Regulators have been wrestling to maintain some semblance of balance in rate increases, but have been mostly unsuccessful. According to state law, regulators do not have the authority to approve or reject rate increases coming from health insurance companies. Commissioner Jones has been fighting for this authority aggressively.
Blue Shield claims rate hikes are necessary
Like other health insurance companies, Blue Shield claims that rate increases are necessary. The insurer notes that it has lost a significant amount of money in the individual market in recent years. These losses are expected to persist well into 2013 and perhaps the next year as well. As such, Blue Cross is raising rates in order to remain in the California market, while also being able to generate enough revenue to become fully compliant with the Affordable Care Act.