California Officials Seek Control Over Insurance Premiums Blue Shield of California has shocked its policyholders with a proposal to raise premiums by as much as 59 percent, effective March 1. The San Francisco-based company says the higher rates are needed to cover fast-rising costs. It's the second time in less than a year that a California health insurer has asked for a whopping increase. Last year, Anthem Blue Cross drew sharp criticism from the Obama administration after requesting a 39 percent rate hike. Anthem Blue Cross ultimately settled for a 20-percent hike.
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Calif. Officials Seek Control Over Insurance Premiums

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Calif. Officials Seek Control Over Insurance Premiums

Calif. Officials Seek Control Over Insurance Premiums

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MICHELE NORRIS, Host:

NPR's Ina Jaffe reports.

INA JAFFE: Twenty-five-year-old Richard Ruiz works in the movie business. He's an assistant to a film director, but going to the movies, there probably won't be much money left for that after March 1st. Ruiz is a Blue Shield of California customer.

RICHARD RUIZ: I came back from the holidays and had an envelope from Blue Shield in my mailbox and opened it up and it was a nice New Year's surprise saying that my rate was going up 57 percent.

JAFFE: And so that brings it from what to what?

RUIZ: I was paying about $70 a month and it's going up to, like, $110.

JAFFE: Ruiz is young and healthy and has a barebones policy.

RUIZ: Basically if I get hit by a car or if, you know, something else catastrophic happens.

JAFFE: But his budget is barebones, too. So, an extra 40 bucks a month is a big deal.

RUIZ: Month to month, when you're basically breaking even and everyone is telling you the best thing you can do as a young person is save and not go into debt and be financially responsible, every little bit matters.

JAFFE: Regardless, California's newly-elected insurance commissioner would like Blue Shield to hold off. In a conference call, Democrat Dave Jones pointed out he was just sworn in this week. And so...

DAVE JONES: I have asked that the company postpone its rate increase 60 days in order to afford me the opportunity to fully review the proposed rate increase.

JAFFE: Though, Jones said that doesn't mean he can do anything about it.

JONES: Unfortunately, under California law, the insurance commissioner does not have the legal authority to reject excessive premium increases.

JAFFE: Now some California legislators and consumer advocates want the state to take more control over health insurance. Such legislation has failed in the past, but Jamie Court, the president of Consumer Watchdog, is feeling more hopeful now.

JAMIE COURT: We now have a new governor. We now have a new legislature and we are now working on legislation this year to do it again. And my consumer group is committed to going to the ballot box to get premium regulation. If the legislature won't give it to us, the voters are going to take matters into their own hands.

JAFFE: Ina Jaffe, NPR News.

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