Colorado Division Of Insurance Reconsidering Anthem Rate Increase
The Colorado Division of Insurance is reviewing the approval they granted last fall for Anthem Blue Cross Blue Shield’s 2010 rate increase – which amounted to an average premium hike of 20% for people buying Anthem’s individual health insurance policies. The Division of Insurance received 35 consumer complaints in December about the Anthem rate increases, which was four times what they normally get. Anthem is confident that the state will come to the same conclusion when they re-examine the numbers that prompted them to approve the rate increases several months ago, and will allow the current rates to stay in place.
Anthem charges the same premiums regardless of whether a policy is new or has been in force for several years. A 40 year old, healthy, non-smoking male who purchases a policy this month will be paying the same premiums as a 40 year old healthy non-smoking male who has had an Anthem policy for ten years, assuming they both live in the same zip code and have the same type of policy. Because of this, it’s relatively easy to compare Anthem’s rates – even after rate increases go into effect – with those of other carriers in Colorado. The rates being offered to new Anthem clients include the rate increases that went into effect in January.
To get an idea of how Anthem’s prices compare with other carriers, I got quotes for a family of three, living in the Denver metro area, for a high deductible, HSA-qualified policy with 100% coverage after the deductible. These plans are relatively easy to compare, as they tend to be quite similar from one company to another. I looked for policies with a $5000 or $6000 family deductible (most companies offer one or the other, but not usually both), or something in the middle of that range if neither exact number was available.
Here’s what I found, from several of the top carriers in the Colorado individual market:
- Cigna = $325 (for a $6000 deductible)
- Anthem Blue Cross = $377 (for a $5000 deductible)
- Humana = $402 (for a $5000 deductible
- Kaiser = $441 (for a $6000 deductible)
- Assurant/Time = $449 (for a $5700 deductible)
- United HealthOne (Golden Rule) = $461 (for a $5800 deductible
- Aetna = $481 (for a $6000 deductible)
Obviously this isn’t comprehensive data. I only got quotes for one family, using a single zipcode. Factors like pre-existing conditions, tobacco use, zipcode, and plan design all have an influence on premiums. But these numbers would seem to indicate that while Anthem’s rate increase may have been large, it seems to be in line with what other carriers are charging in Colorado. For the little test I conducted, Anthem’s premium was the second-lowest I found, and the only one with a lower premium had an additional thousand dollars in out of pocket exposure.
I’ll be curious to see what the Division of Insurance comes up with when they re-evaluate Anthem’s 2010 rates. My guess would be that they will approve the rates. If they don’t, it would stand to reason that they will have to also re-evaluate the most recent rate increases for all of the other carriers in Colorado too.
Jay:
When you say that the 2 40 year olds have the same premiums for the same type of policy, how does Anthem define “same type of policy?”
My experience has been that insurers in Texas (including Blue Cross) can offer a new policy form with a relatively minor change in policy benefits.
Are you saying that once a policy “type” is offered in Colorado, that the “same policy type” must be continued indefinitely?
Even if that were the case, Anthem could offer different “policy types” that made the older, “eternal” policy type obsolete, correct?
Don Levit
Don,
Yes, the policy types are the same for everybody and won’t change. Here is a good article about that: http://www.healthinsurancecolorado.net/blog1/2007/12/02/health-insurance-policy-maximums-stuck-in-the-90s/
And yes, they could stop offering a certain policy and start offering a new one. That is common. Here is another good discussion we had about sunsetting a while back:
http://www.healthinsurancecolorado.net/blog1/2008/11/17/the-affordability-of-individual-health-insurance/#comment-12868
Thanks for the info. We just found out today that our Anthem coverage through my husband’s employer will basically double (from $340 to over $600). This is for a family of 3 with a $3000 deductible (while single employees don’t pay anything!). We’ll most likely have to go elsewhere for coverage (or for myself alone). I would appreciate any suggestions or help as to what I should do! I want to complain and I want to look for other coverage but not sure where to start. Sounds like I need to contact the CO Div of Insurance to start. Thanks so much for your time! I’m so pissed right now I can’t even think straight.
Jay:
Blue Cross seems to have truly distinguished itself from other insurers in pricing renewal premiums similar to the initial premium (for those of similar demographics).
To me, it seems like a big advantage for the consumer to be with Blue Cross.
That way, they know their insurer will not intentionally penalize their long-term clients in lieu of attracting newer, more healthy, customers.
Why would clients prefer insurers other than Blue Cross?
Why don’t other insurers emulate Blue Cross?
Don Levit
Don,
Every carrier has its pros and cons, some more than others. Although Anthem is a good stable carrier with a good policy of rare sunsetting and relatively stable rates, some clients with different variables like age, family size, zip code may see a lower premium with another stable carrier like Cigna, Aetna, United, Humana, or Kaiser. Many clients see the price as the most important factor as long as the carrier is stable and reputable, which is understandable. We personally have had Humana for several years because they just happen to have a very low price on an HSA plan with our desired $5,000 deductible. Look at the Anthem Blue Cross Blue Shield market share over the years though and you’ll see that a big percentage of people must be choosing them for reasons other than price…
http://www.healthinsurancecolorado.net/complaint-ratio.html
You have to look carefully at what the plans cover. For example, some Anthem plans do not let you see a doctor, and some leave you liable for a thousand-dollar ambulance ride. Other Anthem plans let you see a doctor up to three times a year, and cover the cost of an ambulance.
If you are just comparing plans based on cost, and not on what happens if you actually get sick, then these comparisons are valid.
Granted, I’ve never looked at plans in the price range you are using as an example. Maybe plans that are that expensive actually let you see a doctor whenever you want. But those prices are too rich for my blood.
Will,
The plans mentioned are all HSA qualified plans with comprehensive coverage (they don’t leave off doctors visits, ambulance, etc), so they’re easy to compare as ‘apples to apples.’ They all have 100% coverage after the deductible. The rates are quoted for a family of three in the Denver metro area, which is one of the most expensive rating areas.
Plans like you mention that have a limit on doctors visits are usually just set up to have a limit on the copays. Once you meet that limit, the doctors visit is usually still covered, but it is subject to the deductible and coinsurance. HSA qualified plans don’t have copays on sick doctors visits and you’re better off not having a coinsurance after the deductible. Traditional plans with doctors visit copays, Rx copays, and a coinsurance after the deductible are a bad value because you’ll have a higher exposure for the premium you pay vs. a plan that is either HSA qualified or fits that same type of coverage model. And, like you mention, they’re more complicated and hard to understand.