Blue Cross Rate Increases Spread Between 2 Regulatory Agencies in California-Consumer Watchdog Calls on Governor to Merge Insura
Posted Apr 10 2011 12:19am
Now this is a mess, those who are under the area governed by the the state insurance commissioner were granted a smaller increase; however the HMO policy holders are not that lucky and will get a larger increase and see larger co-pays and higher deductibles. So now it appears to be tied up with bureaucracy on what type of plan one has. It was in the news of late that the increase would be smaller for the group under the regulatory jurisdiction of the insurance commissioner. There’s also the pending DOJ investigation about contracts made directly with hospitals but California was not named here.
The consumer watchdog has called upon Governor Jerry Brown to intervene for some type of decision and merge the two regulatory agencies together. Anthem states they lost money on their HMO business and thus the reason for higher increases for premiums in that area. This is confusing to say the least and it comes down to those algorithmic reports to substantiate where they need money I guess. The whole idea of insurance is to spread the cost over a large group and by having the HMO consumers separated from the PPO group under the insurance commissioner doesn’t make sense as the cost does not get spread over a larger group.
By using business intelligence software (algorithms) they isolate their money losing areas and pass along the higher increases to that group only. The company also has some big Medicare contracts where they process claims where lawmakers are finally looking at this process as with all the mergers and acquisitions that have occurred in the last couple of years, there’s some joint efforts with subsidiaries working together for more profits, in other words Health IT contracts that conflict with other areas of claim settlements with no incentives to fight fraud as if too many are removed as fraud, the transaction numbers may drop. BD
Nearly 151,000 Anthem Blue Cross individual policyholders face rate hikes of as much as 26% on May 1, even though far more Anthem individual customers are getting a break this year.
The difference is a result of California's two-headed health insurance bureaucracy.
About 600,000 people with Anthem policies under the supervision of state Insurance Commissioner Dave Jones will see smaller-than-expected increases July 1.
Anthem agreed to cut those rate hikes to 9.1% on average, from 16.4%, amid pressure from Jones and consumers. The Woodland Hills insurer also postponed plans to raise deductibles and co-pays for medical care until January.
Left out were 150,983 customers with individual plans overseen by the Department of Managed Health Care, an agency under California Gov. Jerry Brown . Anthem, the state's largest for-profit health insurer, said it would raise rates an average of 16% for these subscribers May 1, in addition to hiking deductibles and co-pays.
Kay said she faces a 17% hike as well as an increase in her deductible from $2,500 to $2,950, even though she already met the lower deductible in January.
Anthem member Denis Robinson said he tried unsuccessfully to figure it out so he could complain about his May 1 rate hike of 26% and an impending increase in his deductible to $2,950 from $2,500. "It is a maze," he said.
Consumer advocates also are puzzled. On Thursday, the group Consumer Watchdog called on the governor to merge the two regulators under Jones' Department of Insurance, which has a large staff of actuaries devoted to analyzing insurance filings.