Despite objections from the California Insurance Department, health insurance carrier Blue Shield of California and Aetna Inc. are proceeding with double-digit rate increases that state officials said were unreasonable. The rising cost of hospital and physician services, prescription drugs and diagnostic tests are the reasons why both insurer argue that premium increases are necessary.
One might argue, if not also the implementation of the health insurance exchange in CA, under the Obamacare , starting in January might have something to do with it. How come that Blue Shield has given in the last 2 years money back to their policy holders, because they reached a 2 % net profit. Now suddenly the company spokesman Steve Shivinsky said.,”Blue Shield has lost tens of millions of dollars in the individual market in recent years, and we expect similar losses in 2013.” Is anyone questioning such behavior.
In my opinion all insurance carrier are adjusting their rates to be competitive and still profitable with the State Insurance Exchange, “Covered California”. In seminars I am visiting speculations of additional 10-20% rate increases are projected in 2014, as all Individuals are to be covered regardless of health status. Starting next year ,all rates per metall stage inside and outside of the exchange have to be the same. The only way insurance carrier will differentiate themselves are the size of the networks. There is much speculation, but I can see, that everyone will try to hold on to their existing business and this is the last time that significant increases can be powered through without the insurance commissioner being able to intervene.
Health Insurance carrier must submit their proposed rates for 2014 to the exchange this month. Let’s see how affordable health insurance plans will be in Santa Monica in 2014. We will be able to quote in September the plans of the state exchange , called Covered California.