Start panicking – Individual health insurance rates soar in 4 states

February 15th, 2010

Individual health insurance is soaring skywards

Consumers in at least four states who buy their own health insurance are getting hit with premium increases of 15 percent or more, and the other states could see the same thing.

Premiums

Premiums are far more volatile for individual policies than for those bought by employers and other large groups, which have bargaining clout and a sizable pool of people among which to spread risk. As more people have lost jobs, many who are healthy have decided to go without health insurance or get a bare-bone, high-deductible policy, reducing the amount of premiums insurers receive.

Increases

Steep rate hikes in this sector of the insurance market, affecting about 13 million Americans, have popped up sporadically for years. Experts see them becoming increasingly common. “We are going to see rate increases of 20, 25 and 30 percent for individual health policies in the near term,” predicted the chairwoman of the health insurance and managed care committee for the National Association of Insurance Commissioners. In addition, most states don’t have the legal authority to block or reduce health insurance rate increases.

The health care system overhaul

Politicians and even some health insurers are urging a revival of the stalled effort in Congress to overhaul the health care system, arguing everyone needs to be covered by health insurance in order to prevent such premium spikes. In Maine, where Anthem dominates the market, its proposal has several consumer groups planning big rallies at two public hearings on the rates, on Feb. 22 and 24. Under Anthem’s proposal, a family of four could be charged up to $1,876 per month if the proposed rates are allowed to take effect in July.

Wellpoint

WellPoint, based in Indianapolis, has said it needs to raise rates drastically because the weak economy has resulted in fewer people remaining in the individual market in California, and many who do have serious health problems. It says costs of caring for them have been rising due to higher provider prices and more use of diagnostic tests.

Oregon

In Oregon, state insurance officials have concluded that rising costs justify the higher individual premiums, particularly because most insurers cut rates too much in 2006 and then got hit with significant losses. So double-digit increases, some 25 percent or higher, have been approved, or reduced a bit from 2007 to 2010. Insurance Division spokeswoman Cheryl Martinis said the agency has started posting details of all proposed increases on its Webspace site and e-mailing customers when a proposal comes in so they can comment. “People are extraordinarily upset in Oregon, as they are nationwide, about health care costs,” she said.

Never-ending

The spiraling costs of health insurance are linked directly to the spiraling costs of health care. New technologies are astronomically expensive and the health care providers and hospitals want their patients to get the latest treatments and sweep the subject of costs aside. But in the end someone has to pay.

This entry was posted on Monday, February 15th, 2010 at 10:06 am and is filed under Finance, Personal / Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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