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Insurance companies rush to raise rates into the double-digits

By Catholic Online (NEWS CONSORTIUM)
January 7th, 2013
Catholic Online (www.catholic.org)

One of the chief objectives of President Barack Obama's health care reform was to make health insurance affordable for all Americans and prevent sudden increases in the cost of typical health care. This plan has appeared to backfired, as many insurance companies are raising their rates - some by as much as double-digit increases, to beat the looming deadline.

LOS ANGELES, CA (Catholic Online) - California is expected to be hit especially hard by these increases. According to Dave Jones, the California insurance commissioner, some insurance companies could raise rates as much as they can before the law is enacted.

Expected to be hardest hit by the sudden rate increases, are small businesses and people who do not have employer-provided insurance and must buy it on their own.

Aetna is proposing rate increases of as much as 22 percent in California. Anthem Blue Cross could go as high as 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers' filings with the state for 2013.

More troubling about these pending increases is that they arrive after a 39 percent rise sought by Anthem Blue Cross in 2010. This instance, in fact helped give impetus to the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about four percent for families with employer-based policies.

Regulators are now required Under the health care law to review any request for a rate increase of 10 percent or more.

The review clearly demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

New York recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. In contrast, California can review rate requests for technical errors but cannot deny rate increases.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers.

However -- the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.

"This is business as usual," Jones said. "It's a huge loophole in the Affordable Care Act," he said.

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