Outrage Du Jour - Double Digit Health Insurance premium increases

Here comes even more lovely news. HHS is warning, nationwide individuals trying to keep health insurance are going to be hit with double digit premium increases.

People buying their own insurance in at least six states have been facing pressure from insurers to raise rates by as much 56 percent, the report said. Officials said the problem is likely to be more widespread, but data from individual insurers in different states is difficult to obtain.
.[Corporate written Health care bill promo propaganda snipped out from the article]

Proposed premium increases of as much as 39 percent by WellPoint's Anthem Blue Cross in California set off a wave of criticism and forced the company last week to announce a postponement. President Barack Obama seized on Anthem as Exhibit A to make his case for sweeping change before a bipartisan White House health summit next week. California officials said more than 700,000 households face increases averaging 25 percent overall and as high as 39 percent for some.

Meanwhile, someone is cranking through some numbers and calling cash on the plain gouging agenda (this is in reference to yet another health insurance lobbyists op-ed plant via the Wall Street Journal, see link).

let's analyze how much Anthem will be gaining through its recent rate increases:

The same WSJ editorial informs us that Anthem raised insurance rates by up to 39% on 700,000 individual customers. Other sources say the average increase was 25%. I'll make an assumption that this 25% increase amounts to at least $1,000 per year per policy holder. That's a very conservative estimate. Based on that, Anthem will be collecting an extra $700M in premiums this year from individual policy holders. Is it claiming that this is to make up for a $58M loss?

Anthem claims on its website that it has over 6.8 million California members. If 700,000 are on individual plans, then 6.1 million are on group plans. So a 25% increase in individual insurance rates can subsidize a 2.9% reduction in group rates. Or at least can mitigate the inflation in health care costs for group plans by that amount. For the record, large group insurance rates rose by about 10% a year in the past couple of years.

The other claim Anthem is making is that the recession has caused more people to drop their individual plans, making the cost of these policies higher. In fact, the opposite seems to be true. Anthem has decided to raise premiums on its individual plans in order to push individual policy holders out. It's doing that by shifting costs from its large group plans to its small group and individual plans.

Why is Anthem doing this? Why is it forcing individuals to subsidize large group plans? I don't know. But I do know the solution. The current mandate is that Anthem use at least 70% of the premiums it collects to pay for medical services. That mandate needs to be more specific.

Now again, states do have the ability to pass emergency legislation stopping these insurance companies from gouging individuals and small businesses on premiums.

States could do even more. Lest we not forget, Congress sure hasn't done much in terms of practical answers to reduce health care costs in the various health care reform bills stalled in Congress. They will claim it, but frankly it's a crock.

A lobbyist pig fest and ya know, even one little thing, one specific thing, enacted into law to help Americans maintain health coverage by reducing costs...well a pebble can start a wave that breaks the dam and boy do we need that health sector lobbyist dam stranglehold broken.

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