Blue Shield health insurance premiums to increase 59%

Blue Shield health insurance premiums to increase 59%

Blue Shield policy holders in California are bracing for up to a 59 percent increase in their health insurance premiums after the firm announced the hikes which will start on March 1. About 193,000 customers will be affected by the hike that is pending regulatory approval.

The Blue Cross Blue Shield Association insurance subsidiary said that the planned hike has "almost nothing to do with the federal health reform law" and added that it believes that the landmark piece of legislation signed into law by President Barack Obama will ultimately lower the cost of health care in the U.S.

"Our individual market medical costs are rising rapidly due to higher provider prices, increased utilization, and the fact that healthier people are dropping coverage during a bad economy," the company said in a statement identifying the reasons behind the premium hikes.

Even though federal agencies do not have the authority to regulate health insurance hikes, Health and Human Services Secretary Kathleen Sebelius said in a statement that the department has enlisted the help of California Insurance Commissioner Dave Jones about the pending hikes.

"The people of California have a right to be concerned when they see this kind of rate increase month after month," Sebelius said. "We stand ready to assist him and the people of California in any way that we can."

But it is doubtful if Commissioner Jones can block the health insurance premium hikes since he has no mandate to do so under California law.

Jones said he had instead requested Blue Shield to postpone its planned hikes on premiums until a review is done. The insurance commissioner also said he was stunned that Blue Shield would decide to impose additional financial burden on Americans amid the tough economic times.

Posted by James Fried on Monday January 10 2011, 3:58 AM EDT. Ref: CNN. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0