Earlier this year, the Colorado Division of Insurance began a review process of the rate increase they had approved for Anthem Blue Cross Blue Shield last fall. The rate increase of nearly 20% went into effect in January 2010, but the Division of Insurance is reconsidering it, and wading through mounds of paperwork to do so. The process of reviewing the rate increase is a lengthy one, and it will probably take a few more months before it’s completed.
The executive director of the Colorado Consumer Health Initiative, Dede de Percin, noted that “This rate hike sounds outrageous and it is outrageous but it’s probably not a case of gouging. That’s the thing. That’s the real story. The rising cost of health care.” She also explained that last year, the actual increase in expenses for health insurance carriers in terms of money spent to pay members’ medical claims, increase by 12%. As long as we continue to have double digit increases in the cost of claims, double digit increases in premiums are pretty much unavoidable. Consumers express outrage over the large premium increases rather than the increases in the cost of care, simply because they generally aren’t aware of the increases in the cost of care. But there is no feasible way to bring down the cost of health insurance without addressing the cost of care.
As I noted last month, while Anthem’s rate increase for 2010 was a big one, their premiums are still very much in line with premiums currently being charged by other individual health insurance carriers in Colorado. My guess is that de Percin’s take on this is probably correct: “… it is outrageous but it’s probably not a case of gouging.”