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Freedom Benefits Association was pleased to read California's Insurance Commissioner urge Anthem Blue Shield’s customers to look around for other more insurance exchange options. Up to 800,000 Californians who buy their own health insurance will need to reconsider their insurance options this month or face rate increases of up to 39% on March 1. "Helping buyers find affordable options is the foundation of our service" added Tony Novak, founder of Freedom Benefits. "No single insurance plan is the best deal for everyone and every health plan has its strengths and weaknesses". Anthem Blue Shield is currently the most popular health plan for individuals in California but the market share may decline modestly following recent rate increases.
In a statement issued today Commissioner Steve Poizner said “I’m alarmed by the Anthem Blue Cross health insurance rate hikes, especially in a time when the recession has forced so many people into the individual health insurance market,” said Commissioner Poizner. “State law requires that insurers spend at least 70 cents of every dollar of premium on medical care. I have instructed my department to hire an outside actuary to examine their rates line by line to ensure they are complying with this state law. If we find that their rates are excessive, I will use the full power of my office to bring these rates down". Freedom Benefits believes that the sharp rate increase is more likely attributable to the state's insurance mandates rather than an improper action of Anthem officials.
Commissioner Poizner also reminded Californians who have to
purchase individual health insurance that there are dozens
of insurance companies to choose from that offer individual
major medical insurance, supplemental health insurance and
mini-med coverage in California.
choose from nearly 70 different companies who offer health
insurance in the individual health insurance market,”
Even the federal government took a strong stance in the price shocker. In
a letter to Blue Shield, Obama's Health and Human Services Secretary Kathleen Sebelius wrote "These extraordinary increases are up to 15
times faster than inflation and threaten to make healthcare
unaffordable for hundreds of thousands of Californians, many
of whom are already struggling to make ends meet in a
difficult economy." The federal government may make
inquiries but is relatively powerless to overstep the
state's control of this insurance issue.
The Los Angeles Times carried comments from a number of concerned residents. Some were willing to blame the insurance company but others looked past the rate formula for the underlying cause. One comment said "the market is too regulated, thinning out the potential competitors." Another pointed out that "The government has a lot more culpability in the causes for the excessive cost of insurance than it wants to own up to but is more than happy to let private insurance be the scape goat." It seems likely that many customers are unaware that the formula for spiraling rates is built into the laws that regulate California's health insurance. State lawmakers are not required to consider the financial effects of new regulations in laws that affect the actuarial factors of the state's commercial health insurance. Private health insurance rates are required to absorb the medical costs of Californians who are uninsured. Under this type of unstable financial design, the huge cost increases are unavoidable. The same out-of-control premium rate inflation incurred in other states like New Jersey where lawmakers were more concerned with making insurance available to all on demand without considering the impact on affordability. In this environment, the best way to escape the spiraling rate increases may be to find an insurance plan that legally sidesteps the problematic regulations. Some specialty health plans are permitted to design coverage with a primary goal of keeping rates low rather than focusing on offering higher level of benefits and availability.
Freedom Benefits' California health insurance exchange lists alternate insurance companies that offer health insurance along with contact information, pricing and secure immediate online enrollment. OnlineAdviser service can help individual consumers compare specific features and limitations of the different health plans available. We expect that additional information and suggestions on specific options available will be distributed over the next few weeks through the regular OnlineAdviser publications.
This web site is independently owned and managed by Tony Novak operating under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator". Opinions expressed are the sole responsibility of the author and do not represent the opinion of any other person, company or entity mentioned. Tony Novak is not an agent, broker, producer or navigator for any federal or state health insurance exchange but may provide uncompensated advice, reviews and referrals to these official resources. Novak is compensated as an accountant, adviser, affiliate consultant, marketer, reviewer, endorser, producer, lead generator or referrer to some of the commercial companies listed on this site. Information is from sources believed to be reliable but cannot be guaranteed.