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Health insurance companies to raise rates on Californians in May

April 6, 2012 12:00:00 AM PDT
San Francisco resident Tama Greenberg is frustrated over yet another rate increase on her health insurance policy. This time, the Anthem Blue Cross customer's premium jumps almost 20 percent on May 1, bringing her monthly payment to $635.

A million other Californians and small business owners who buy their own insurance through Health Net, United Healthcare and Anthem Blue Cross are also affected. For many this is the third hike in two years.

"It's sure getting to be almost a huge percentage of my income just for the health insurance alone," Greenberg said.

In a statement, The California Association of Health Plans explained: "With 85 percent of premiums going directly to medical care, new drugs and medical technology, increasing rates of chronic disease and underpayment from government programs like Medi-Cal are some of the biggest cost drivers."

The California Insurance Commissioner already has the power to reject rate hikes for car and homeowners insurance, but not for health plans.

The Legislature is trying once again to pass a bill to give the Insurance Commissioner more power over health insurance rate hikes, but just in case that fails, Consumer Watchdog is circulating an initiative to let voters decide on the November ballot.

But opponents of both proposals say it's not a good idea to give such power to one politician, and they fear insurers will just cut benefits to keep profits high.

While some Californians are thinking of dropping their health insurance with this rate increase, Greenberg questions whether it's even worth having coverage.

"I get afraid that if I use it too much, they will increase my rate or drop me, which is probably the biggest fear that most self-employed people have," Greenberg said.


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