Nearly 200,000 customers will be affected by Blue Shield of California's decision to cancel a May 1 rate increase. The hike, averaging 6.5% and going as high as 18%, would have been the third in recent months by the company, which had faced pressure from state officials and consumers.
Blue Shield of California on Wednesday canceled a May 1 insurance rate increase for nearly 200,000 customers amid pressure from state officials and consumers who criticized the company for seeking its third rate hike in recent months.
The May 1 increase, averaging 6.5% and going as high as 18%, would have come on top of two others in October and January. Together, the three increases would have raised some Blue Shield members' monthly premiums as much as 86.5%, the company disclosed last week.
The San Francisco nonprofit said that individual policyholders will see no further rate increases this year.
Blue Shield said the cancellation will deepen the company's multimillion-dollar losses in California's individual insurance market. The company said its decision will save individual policyholders $35 million to $40 million this year.
"Our not-for-profit mission is to provide Californians with access to quality healthcare at an affordable price," Chief Executive Bruce Bodaken said. "As longtime advocates for universal healthcare coverage, we are also deeply committed to the success of health reform. The best way to fulfill our mission and make reform work is to keep costs down. By agreeing not to raise rates this year, we are helping to make coverage more affordable for our members during tough economic times. It's a financial risk for us, but a risk that's worth taking."
Blue Shield is the second major California insurer in less than a year to cancel a rate hike after facing an intense public backlash. Anthem Blue Cross threw out a rate increase of up to 39% last April and ultimately settled for hikes about half as large as it originally sought.
Blue Shield had planned its latest hike for March 1 but put it on hold for two months after California Insurance Commissioner Dave Jones asked for a delay to study the rate filing.
Poster Comment:
Great news. Now I can afford to pay for my free market insurance policy for a few more months.
