Regulators Vow to Prevent Massive Rate Hike

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    Doctor.

    State and federal regulators say they will prevent a massive hike in premiums for those insured with Blue Shield of California

    The company told nearly 200,000 policyholders that rates would climb 30 to 35 percent on average, in some cases even 59 percent, on March 1.
     
    California Insurance Commissioner Dave Jones has asked Blue Shield for a 60-day delay so he can review the rate increase. A hike in premiums in March would be the third increase since October 1. 

    "Many Californians are understandably angry and upset over these rate hikes," said Jones. "Unfortunately, under California law it's simply the case that the insurance commissioner does not have the ability to simply reject excessive rate increases."
     
    U.S. Secretary for Health and Human Services said she's ready to assist California.

    "The people of California have a right to be concerned when they see this kind of rate increase month after month," Kathleen Sebelius said.
     
    Dr. Ted Mazer of the San Diego County Medical Society is a customer of Blue Shield of California and was told his premiums would climb nearly 20 percent. But he is also paid by Blue Shield for treating patients and said the numbers don't add up. 

    "I get these two letters. One is always, ‘your premiums are going up because we're paying the doctors more.’ Within a week I get a letter in the office that says, we're readjusting your payments and some things are going down," Mazer said. 
     
    Mazer will have to pay $683 dollars a month to cover himself and his wife with an $8,000 deductible. He complained that he would have to pay over $8,000 in premiums in a year plus the deductible before his insurance company would pay for anything. 

    "For most people, that's unaffordable," he said.
     
    Insurance companies have seen higher costs following the passage of healthcare reform law, said Professor Carleen Stoskopf Sc.D. at SDSU Graduate School of Public Health.

    "They must take children, people with pre-existing conditions and we have an aging population," she said. 

    But Stoskopf said these costs don't justify a 20 to 60 percent hike in premiums.
     
    Stoskopf and Mazer believe insurance companies are trying to maximize profits before they face tighter regulation. 

    "These plans are looking at more and more scrutiny if they want to try to raise their premiums and that scrutiny is not in place yet. The regulators haven't got there. So if you want to try and maximize now for the long term, you need to get the maximum increases you can put it," said Mazer.