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Blue Shield of CA Backs Down from Another Rake Hike

Source: CNN


Posted on 17 Mar 2011

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Blue Shield of California of announced Wednesday that it will forego a new round of rate hikes that would have brought the increase for some policyholders to as much as 59% in the past year. The new rate increase would have affected nearly 200,000 customers.

Blue Shield -- which had already raised premiums twice since October -- also said it will not increase rates for any individual or family plan member for the remainder of the year.

Tom Epstein, spokesman for Blue Shield, said the company had seen some backlash in recent weeks.

"It was becoming a major distraction," he said. "So we decided we would risk losing money in order to get the attention of the public back on what's really driving up health care costs, and that's rising medical costs. Health reform, we believe, will help manage those costs."

Ioannis Kazanis, a spokesman for California Insurance Commissioner Dave Jones, said regulators were "a little surprised" by the Blue Shield's decision to back away.

"We are surprised because Blue Shield had agreed to a 60-day hold and our staff was working on our review of the rate increase," he said. "But Blue Shield announced this [decision to withdraw the increase] before we completed our review."

Health and Human Services Secretary Kathleen Sebelius said in a prepared statement that Blue Shield's decision was "good news for consumers."

"The high premiums that Californians have faced highlight why we need more transparency and accountability in the health insurance market," she said.


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