Blue Shield of California agrees to delay rate increases for 60 days
After initially balking, Blue Shield of California has agreed to a request by the state's insurance commissioner to delay a March 1 rate increase for 60 days.
California Insurance Commissioner Dave Jones had called on the San Francisco-based insurer last month to postpone the pending increase for nearly 200,000 individual policyholders so his office could closely examine the paperwork. But the nonprofit company said it would go ahead with its hike and hire an outside actuary to review its filing.
On Tuesday, the company did an about-face. Chief Executive Bruce Bodaken said Blue Shield would comply with Jones’ request.
“We are taking this action to remove any doubt that the rates we have submitted are necessary to pay the medical expenses of our individual members,” he said.
“Even with these increases, we don’t expect the premiums to cover the cost of medical care for these members,” Bodaken added.
Blue Shield has faced intense criticism from consumer groups and elected leaders for seeking multiple rate increases over a six-month period that could push policyholders' rates up as much as 59% cumulatively. The insurer blamed the increases on escalating healthcare costs and new government mandates, among other factors.
Three of Blue Shield’s competitors -- Aetna Inc., Anthem Blue Cross and PacifiCare –- already agreed last week to delay their own rate increases for 60 days to give Jones time to review them.
Jones said that hundreds of Blue Shield policyholders had contacted his office to voice their anxiety about the rate hikes. On Tuesday, Jones said that he was pleased that Blue Shield had joined the other insurers, and that the delays would give his office “adequate time to review their proposed rate filings to ensure that the information submitted is complete, accurate and in compliance with the law.”
Jones said that his department does not have authority to reject excessive rate increases, but that he will determine whether all of the proposed hikes are “unreasonable.” He said he would post the information on his website.
-- Stephen Ceasar and Duke Helfand