Health insurance companies are feeling the crunch of looming health care reform. Anthem Blue of California recently threatened to raise rates, and now other health insurance providers are following suit.
Sky-high health care premiums are nothing new. Break a leg and the costs will likely be more than bargained for. The latest controversy stems from Woodland Hills based health insurer Anthem Blue Cross who recently announced that it would up the rates on many of its individual customers.
The proposed health insurance rate hikes would mean that over 800,000 people may be affected by higher premiums and monthly costs. California authorities as well as the Obama administration’s Health and Human Services Secretary, Kathleen Sebelius has demanded that the company delay its efforts and explain its exact motive.
The outrage over Anthem Blue Cross’ latest maneuvering has brought to light other insurance companies’ own rate hikes. The health insurance provider HealthNet, for example, has continually raised its prices as well. Some customers have seen as much as a 49% increase in insurance coverage premiums.
Anthem Blue Cross’ parent company, Wellpoint which is based in Indianapolis, has also started the premium rate hike shuffle. Customers in Indiana will start seeing prices rise beginning in March. Retiree Perry Stow, recently received notice that his individual coverage would rise from $280 to $387.49 a month. This is an increase of 38%.
Individuals are more susceptible to rate increases because health insurance companies generally have free reign over pricing. Anthem Blue Cross and other California providers, for instance, cannot be regulated on pricing. They can actually change prices whenever and however they want.
Employer-provided health plans, on the other hand, are harder to work around. People in those plans are pooled differently then individuals. Everyone is counted and averaged based on age and health factors. Thus, the younger, healthier workers theoretically make up for the older, less healthy workers.
As health insurance costs rise, many individuals tend to opt of having health insurance altogether. This then creates a domino-effect making premiums go up for those who remain. As medical costs rise, insurance costs must rise as well especially with fewer people to support the overall well when it comes to individual insurance.
For now, government investigation into Wellpoint, and Anthem’s motives will stall any rise in health insurance costs. However, many customers are still left with expensive insurance that they simply cannot afford. If this continues, the strain on the already ailing health care system may be too great to ignore.
Written by Lani Shadduck
HULIQ.com
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