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Obamascare? Blue Shield of Calif. Mulls Proposal to Boost Premiums as Much as 20 Percent

Dec. 13, 2012 11:02am Becket Adams

Consumer advocates are asking Blue Shield of California to not increase rates on its 300,000 customers by an average of 12 percent (effective in March) and to instead use its $3.9 billion reserves to help offset the expected costs of The Patient Protection and Affordable Care Act.

The company has proposed a maximum increase of 20 percent.

Consumer advocates argue that Blue Shield is sitting on plenty of cash and, therefore, it has no reason to increase rates.

“Blue Shield is sitting on a huge surplus that is beyond what is required or necessary,” Laurie Sobel, a senior attorney for Consumers Union in San Francisco, told the Los Angeles Times. “It should be used to hold down rate increases when it hits these extraordinary levels.”

As the L.A. Times notes, Blue Shield’s surplus is “nearly three times as much as the Blue Cross and Blue Shield Assn. requires its member insurers to hold to cover future claims.”

The California insurance commissioner and the state Department of Managed Health Care are currently reviewing Blue Shield’s proposed premium increases. However, as the Times also notes, neither agency can has the power to “reject change in rates.”

“Some other states limit how much surplus can be held by nonprofit health plans. Other regulators press nonprofit insurers to return more money to consumers and the community overall since their stated mission is to serve the public good,” the Times’ Chad Terhune explains.

“Washington’s insurance commissioner has said the two big nonprofit Blue Cross and Blue Shield plans there hold enough surplus to allow a portion of it to be used to reduce rates,” he adds.

Meanwhile, Blue Shield explains that its reserves — which have increased by a full 77 percent since 2006 from $2.2 billion to $3.9 billion – have nothing to do with the proposed rate increases, adding that that cash has been put aside for the benefit of its policyholders.

“Reserves are needed to ensure our members’ claims can be paid no matter what,” said Blue Shield spokeswoman Lindy Wagner. “We need them to protect against uncertainties like a pandemic or another crisis.”

So what’s the deal? Why is BSoC even talking about rate increases? One word: “Obamacare.”

Yes, because The Patient Protection and Affordable Care Act will flood the market with new customers, Blue Shield expects an exponential rise in costs.

“It’s a once-in-a-lifetime change in the healthcare market that will bring a lot of volatility, and we need higher reserves for that,” Wagner said.

But even with the rate increases, Blue Shield expects to lose money in the individual insurance market next year.

“Blue Shield said its reserve has grown at a slower pace since its pledge last year to limit profits to 2% of annual revenue and return millions of dollars to customers. The company announced that move after a consumer backlash to a bid to raise rates as much as 59% in 2011 that was later dropped,” Terhune writes.

“Overall, the company said it has returned about $520 million to customers over the last three years because of the 2% limit on profits,” he adds.

State officials are expected to finish reviewing various rate filings in the coming weeks.

Follow Becket Adams (@BecketAdams) on Twitter

Front page photo courtesy Getty Images

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Comments (72)

Uechi
Posted on December 13, 2012 at 12:54pm
No surprise here. This is the whole intent of Obama’s Marxist health care plan. The system is designed to eventually eliminate all private health care insurance providers and make everybody 100% dependent on the Government. Are there any idiots out there ,besides the lefties, that really think this system is going to be cheaper and better? It will be neither.

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- JRook
  Posted on December 13, 2012 at 2:26pm
  “offset the expected costs of The Patient Protection and Affordable Care Act” That’s not what they said beckett, they said volatility which is a term related to a perceived change in the risk profile. Which may or may not happen. With the excess reserves they are sitting on it would seem any perceived change in risk is more than covered….. Increase denied.
  
  Report this comment
- j_aa_k
  Posted on December 13, 2012 at 2:41pm
  Exactly, they new that with all of the misinformation that has been spread on the right that
  people would blame it on the Affordable care act. This is why it was so important that the
  people had the freedom to choose the public option. These insurance companies would not be
  able to get away with this type of behavior if they had to compete against a fairly priced
  public option.
  
  Report this comment
- DABIGRAGU
  Posted on December 13, 2012 at 6:35pm
  J_AA_K, when you cut and paste it helps if you realign the sentence/paragraph structure.
  Busted, tool.
  
  Report this comment
- j_aa_k
  Posted on December 13, 2012 at 8:42pm
  Dabigragu, so exactly where did I go to find a pre-written form response to a stupid comment on a two bit news response. In wacko conspiracy theory land the left wing spin machine must be quite powerful…if you must know I was at work and was writing in word and copying and pasting. But just so you know it is me, without the public option these greedy CEO’s will continue to pad there fat wallets at the expense of average americans like yourself.
  
  Report this comment
grams09
Posted on December 13, 2012 at 12:36pm
I hadn’t used my Blue Cross/Blue Shield until this past couple of weeks. First I found out my new prescriptions had to be “pre-approved” by my medical insurance after I drove 25 miles one way to pick up my new prescription. Then on Monday my doctor ordered some lab work and some other tests. I can’t schedule my appointment to have them done until Blue Cross/Blue Shield gives their ok for the test to be done. Grrrrr…How much do you want to be they don’t get approved until after the new year and my deductable starts all over again? Thank you Washington D.C.

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toledofan
Posted on December 13, 2012 at 12:34pm
No surprise here, everybody knew that pirces were going up and this is just the start, just wait until the other parts kick in like the tax on all equipment, how about the tax on visits, and oh yes don’t forget about the death panels and their influence on what gets covered and what doesn’t. The Democrats have created a very bad bill and once it’s in place, guess who gets the bill.

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- ranepowel
  Posted on December 13, 2012 at 1:05pm
  You realize that death panels were proven to be non-existent and false, according to all major fact-checking groups, yes?
  
  Nah, go ahead. Continue fear mongering. It’s cool.
  
  Report this comment
- GardenoftheGods
  Posted on December 13, 2012 at 1:31pm
  Premiums have been going up for the last 2 years…of course the insurance companies are going to get their last chunk out of the consumers who can pay….I wish people would’ve been more aware of the dangers of ObamaCare before the election; but they chose to sleep or continue to collect their benefits-while we the taxpayers continue to bleed money. God help America!
  
  Report this comment
- Master.Debater
  Posted on December 13, 2012 at 1:46pm
  You won’t even know you’ve been death paneled. Your doctor just won’t offer you the treatment. That how it works in Europe. Ignorance is bliss.
  
  Report this comment
- Master.Debater
  Posted on December 13, 2012 at 1:48pm
  Those who are actually paying premiums themselves are much less likely to be Obama voters.
  
  Report this comment
- objectivetruth
  Posted on December 13, 2012 at 2:23pm
  @masterdebater
  You are right most won’t know if they have been death paneled.Don’t worry though there will come a time when all of you know.You will be literally treated to death for diseases and conditions you don’t have.They will claim you to be retarded crazy or any number of things to justify getting dominion over you.They then will claim you have a fatal disease and need treatment.They will make housecalls to threat you for the non existant disease.This maybe a form of torture [if they think you could be useful to them]pr quick death.You will be hauled away to a morgue frozen then transported to the crematorium.
  I know this how.School of hard knocks.This what the hidden eos in america does.
  
  Report this comment
davidwjohnson
Posted on December 13, 2012 at 12:31pm
Instead of trying to get the blind to see, take higher ground and save yourself from what’s coming.

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environmentalandawake
Posted on December 13, 2012 at 12:23pm
I assure you that Blue shield had their folk pour over Obummercare long ago and made fiscal decisions based on what they expect this to cost them in the future. The important aspect of this article is not that they have some cash on hand, but what they have decided this program will cost in the future. Oh, I forgot Obummer told us all that we should not have any appreciable increase in our rates. Has that A#$ ever told the truth?

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Bonnieblue2A
Posted on December 13, 2012 at 12:22pm
Not in CA but I did receive another notice of premium increase effective Jan. 1st from my BC/BS health insurance. Mine is a 25% increase. It is third increase since Obamacare was passed (so we could see what was in it). The overall increase with this one will be 90% since the passage of Obamacare. I am self-insured with catastrophic coverage only.

EFF-OBAMACARE and the witch who writes the rules: the pro-abortionist Sebelius.

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- HumbleMan
  Posted on December 13, 2012 at 12:41pm
  My insurance has done about the same over the last 3 years. It seems most Democrats don’t understand there is no Tax that does not ultimately get passed on to the consumer.
  
  Report this comment
- ranepowel
  Posted on December 13, 2012 at 1:20pm
  Prove it. Post your bills and the amount they have increased, with all personal information deleted. Because there is no evidence out there that rates have increased for anyone by more than 25% since Obamacare has been implemented, unless there are other risk factors and health concerns to account for.
  
  You’re lying, and you know it. And it’s just sad.
  
  Report this comment
- Master.Debater
  Posted on December 13, 2012 at 1:43pm
  Premiums on my individual policy have also gone up 20-30% per year since 2010.
  
  Report this comment
- Master.Debater
  Posted on December 13, 2012 at 1:45pm
  the 25% increase number from the Obama propaganda machine is total BS.
  
  Report this comment
- seanscythe
  Posted on December 13, 2012 at 3:02pm
  @Ranepowel
  
  Here is your proof, this is from mine in Louisiana.
  http://imageshack.us/photo/my-images/255/healthcarecost.jpg/
  
  Report this comment
- Heffe44
  Posted on December 13, 2012 at 3:23pm
  My rates have gone up 20-25% since 2002… this was going on long before the ACA. It was the Republicans that stripped all the cost control mesures out of the ACA. This is the free market at work.
  
  Report this comment
- @SoquelCreek
  Posted on December 13, 2012 at 4:06pm
  This chart shows our company’s experience with Blue Shield of California and Obamacare.
  http://www.twitpic.com/ayuzzz/full
  
  Between the time President Obama proposed Obamacare and the time he signed it into law, our business had two 15% increases (a combined 32% increase).
  
  Within months of Obamcare passing, we experienced an additional 29% increase followed by another 1% increase just 66 days later.
  
  Since then, we’re back to a rate increase of 15% roughly every 1.2 years or so.
  
  Since President Obama took office, our premiums by increased 98% — almost DOUBLED!
  
  Report this comment
- nationoflaws76
  Posted on December 13, 2012 at 9:17pm
  Yep ! Me too. Our rates w/bluecross/anthem has increased over 121% since obama was elected in 08. I think I may fall into the abyss of the uninsured. Our govt is run by absolute Morons who are clueless of how much the individual has to pay when not in a group due to job loss or worker’s comp injured workers with pre existing conditions. Oh well. I want my insurance company to have reserves so they can pay my medical should i need it
  
  Report this comment
Dscriptboy
Posted on December 13, 2012 at 12:18pm
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!

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@SoquelCreek
Posted on December 13, 2012 at 12:15pm
As a small businessman in California, here is my company’s experience with the cost of Blue Shield and Obamacare. The number of employees and their health has not changed over the years, merely the cost. The chart also shows when President Obama proposed Obamacare and when he signed it into law.
http://www.twitpic.com/ayuzzz

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doomytram
Posted on December 13, 2012 at 12:14pm
This is one of those Obozo re-distribution things where Obozo and his Health Insurance companies quietly double the cost of your already overpriced health insurance if you make $250,000 per year, so that the Obozo drones can go to the same doctors as the rich and pay nothing. No copay No premiums No Nuttin. That’s the goal, if you are an Obozo drone and make 90K per year, then you can get the Obamacare for flat Ozero dollars.

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Dismayed Veteran
Posted on December 13, 2012 at 12:08pm
I love this:

TINSTASAFL

Only fiscal conservatives believe there is no such thing as a free lunch.

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stickyicky97
Posted on December 13, 2012 at 12:02pm
Are Americans really shocked? This was the plan all along…………force private insurance companies to raise their rates and premiums so high that consumers are forced into the Federal Exchanges that have lower, taxpayer-subsidized coverage, and bully Americans into a single-provider (Universal/Government Healthcare) system.

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- ranepowel
  Posted on December 13, 2012 at 1:01pm
  Yeah, and a lot of us can’t wait to have a system like in Canada, France, England, Japan, etc, etc.
  
  Report this comment
- FightingBear
  Posted on December 13, 2012 at 1:03pm
  You are 100% correct.
  
  Report this comment
- Master.Debater
  Posted on December 13, 2012 at 1:50pm
  Just be sure and stay healthy ranepowel
  
  Report this comment
NoLies
Posted on December 13, 2012 at 12:01pm
as Bill Clinton would say “it depends on how you define free & affordable”. This is only the beginning folks – love it when a plan comes together!

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banjarmon
Posted on December 13, 2012 at 11:45am
You get what you voted for…I tried to FIRE BHO ****!!

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Jack76
Posted on December 13, 2012 at 11:38am
I’m guessing that the federal government can ruin the US health care industry in less than 10 years unless the abomination known as Obamacare is repealed.

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- Cavallo
  Posted on December 13, 2012 at 11:48am
  The hope of the repeal of Obamacare died sometime ago, the reelection of bobo the wonder marxist just drove in one of the last nails in the coffin of repeal. This is the new America.
  
  USA RIP
  
  Report this comment
- oldguy49
  Posted on December 13, 2012 at 11:51am
  as in england…….once implimented it is nearly impossible to get rid of……………the english health care system now has with administration almost 2 million employees……………..vote that out…………right
  
  Report this comment
- M13
  Posted on December 13, 2012 at 11:52am
  That is the plan, go to single payer with the Government in full control of your health care.
  
  Report this comment
- ranepowel
  Posted on December 13, 2012 at 1:08pm
  You realize England has a better health care system than America, even though it is a national system, correct? Look at any statistics about infant mortality rate, life expectancy, etc. England, France, Canada, Japan and many, many other socialized heath care providing countries beat us on any and every list of health statistics that are available.
  
  Except one.
  
  America is number one in cost to the individual.
  
  Report this comment
- revelation2012
  Posted on December 13, 2012 at 8:03pm
  work on 2/3 majority in house and senate,,,
  
  Report this comment
RodT82721
Posted on December 13, 2012 at 11:33am
Oh no! Does this mean that forcing insurance companies to cover things like pre-existing ailments, and lots of goodies, is going to raise the premiums?
These are not just freebies from Obama?
Forced coverage of the many with very expensive ailments that any real insurance company would never agree to take on?
Insurance was never a pre-paid health plan until Obamacare, it was a low cost hedge against bankrupting illnesses, where the costs were determined by the odds. Not forced expenses.

The usual answer to such daunting problems that crop up every time govt decides to “fix” something, just let the income tax payer foot the bill. Then all he moochers will still vote for their leaders. At least that’s what our US Congress does.

Who would have ever thought that providing 30 million insurance policies for the those that can’t or wont pay their own way, would actually cost more?
Barry told us it would reduce our costs! Oops!

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- objectivetruth
  Posted on December 13, 2012 at 2:05pm
  I agree with you on everything but one.The pre existing clause.While its true that some preexisting conditions are enormously expensive many aren’t.They are easily managed by the patient and paid for out of pocket.Unfortunately the insurance companies lumped those with minor preexisting conditions with those who had devastaing conditions.Should someone with mild allergys skin conditions[used as a reference point as they are the most common] be lumped in with cancer patients for rate purposes?No of course not.Had the insurance companies considered this and made voluntary changes this wouldn’t be a issue.For what its worth I have noticed that many reputable insurance companies no longer lump them in together.I had noticed this though a few years back before obamacare was even thought of.
  
  Report this comment
jessieH
Posted on December 13, 2012 at 11:30am
It doesn’t matter. I will not comply!

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- ranepowel
  Posted on December 13, 2012 at 1:18pm
  I love the people who say they won’t comply with the law. Firstly, because they hurt and kill their credit rating, making buying a car or house almost impossible for every month they are hit by the collections agency seeking to collect on the penalty money owed; but, secondly, I love the people that will be without health insurance, who will then get sick or in an accident and force everyone else WITH health insurance to pay through higher premiums due to these selfish jerk offs.
  
  “Oh, I’m so conservative I’m not going to have health insurance to stick it to Obama. Never mind the fact that all I’m really screwing over are the doctors, nurses and hospital staff who will have to treat me without insurance, as well as the people in my local community who will have to pay higher costs for health care because my costs were through the roof due to lack of health insurance. God almighty, I’m such a flag-waving rebel.”
  
  Report this comment
- objectivetruth
  Posted on December 13, 2012 at 2:37pm
  yeah and I would bet that you would be more than happy to have a doctor commiting fraud get well paid for the fraud too, wouldn’t you?If the doctor not only billed for services not rendered but instead sent a phony bill in and tortured the patient to boot he would be just great in your eyes wouldn’t he/
  What you weren’t aware that doctors billed falsely and then commited unspeakable acts to them as justifiction for the bill?You know crimes against humanity.So tell me how much do you plan on being paid for your next murder tell me inquiring minds want to know?How many patients have you falsely diagnosised with cancer as a cover for your tortures?
  I’m sure you would want a single payer too.It makes it so much easier to hide the genocide you aim on commiting doesn’t it,
  
  Report this comment
Cavallo
Posted on December 13, 2012 at 11:29am
Hey… Bobo the wonder marxist told us we could keep our insurance plan if we wanted… what the first gay dog eating fascist autocrat left out was .. you can keep your plan if you can afford it. You can insure just about anything.. one singer/diva insured her legs.. it just depends on if you can afford the rates. Lloyds of London does a lot of strange insurance deals. Private insurance may become one of those oddities after a few decades of centrally controlled marxist management. Although I wonder if the country itself will last that long.

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CWPrequired
Posted on December 13, 2012 at 11:27am
Did someone say single payer system here we come?

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biohazard23
Posted on December 13, 2012 at 11:25am
They’ve already increased my premiums earlier this year and now they want to jack them up even more? Thanks. Thank you soooo much, Dear Leader, for ensuring that my family has even less take-home pay due to your Not-So-Affordable Patient-Gets-Screwed Lack-of-Care Act. Like no one saw THIS coming. Vous moche, pas bon, morceau sans valeur d’excréments. Mon dieu…. Fils de pute ignorants…

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HKS
Posted on December 13, 2012 at 11:24am
Is this Obame care a great thing or what.

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coyote1hell
Posted on December 13, 2012 at 11:22am
Buh’rack-care is NOT free, fools, this is going to cost you dearly, and if you don’t PAY, Buh’rack will come after your bank account…..count on it…

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red_white_blue2
Posted on December 13, 2012 at 11:22am
You mean my bill has to increase to help pay somone else’s bill? I’ll have to try that at a restaurant some time. See if I can get a liberal to pay more so as to pay into my tab!

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Jeanne2010
Posted on December 13, 2012 at 11:21am
I have Anthem Blue Cross in CA and just got a letter stating they were raising my rate 24% starting Feb. 1st, in part, for the pre-existing condition mandate.

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- ranepowel
  Posted on December 13, 2012 at 1:06pm
  Then change health providers. I live in LA and my rates have not changed since 2009.
  
  Report this comment
- seanscythe
  Posted on December 13, 2012 at 2:41pm
  @ Ranepowel
  Prove it post your bills with the personal info removed.
  I call BS on what you say because you are probably some 25 year old still mooching off mom and dad.
  
  Report this comment
bumfuzeled
Posted on December 13, 2012 at 11:20am
At the same time they are reimbursing their physicians and hospitals less thanks to Obamacare insurance laws

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ArmedAndReallyPissed
Posted on December 13, 2012 at 11:15am
You asked for it Commies, get ready to pay the Piper.

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- Snowleopard {gallery of cat folks}
  Posted on December 13, 2012 at 12:01pm
  And pay it in spades.
  
  Report this comment

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