Advocates crow as Blue Shield yanks rate hike

Sacramento and Washington are abuzz over Blue Shield of California’s announcement today that it’s withdrawing its plan for a May 1 increase in health insurance rates for individual policyholders.

Blue ShieldIt would’ve been the third such rate hike since October; the three hikes combined would have raised rates by as much as 87 percent for some of its 200,000 policyholders, according to the California Department of Insurance. San Francisco-based Blue Shield has said rising health care costs forced the previous rate hikes; it said it lost $27 million on individual policies last year and expects more such losses this year. The cancelled increase will save members about $35 million to $40 million in added premiums.

Health-care affordability advocates say federal and state health-care reform laws are responsible for the insurer backing down.

“This latest withdrawal by Blue Shield shows that scrutiny matters. The new spotlight on rising health insurance rates, placed by the new federal health law and aggressive implementation at the state level, is having an impact of saving consumers money,” Health Access California Executive Director Anthony Wright said in a news release.

But while the Department of Managed Health Care and the California Department of Insurance now have the authority to review whether or not proposed rate increases are excessive, unjustified or unfairly discriminatory, neither department has the authority to reject such an increase.

“This is the third insurer that has withdrawn or reduced rates as a result of additional scrutiny and requests that they justify those rates. New federal and state laws now make these rate hikes public, but we need to take the next step, to pass the rate regulation bill now pending in the California legislature,” he said. “Blue Shield says they want a focus on the medical costs driving health care costs – but that’s what rate review and regulation would help do.”

And that’s what California Insurance Commissioner Dave Jones says he’s intent on doing. He wants to bring California in line with the 20 states in which insurance regulators have authority not only to review rate hikes but to reject the excessive ones; he has sponsored AB 52, carried by Assemblyman Mike Feuer, D-Los Angeles, to give that authority to his office and the DMHC. (Actually, the bill right now just declares the Legislature’s intent to make such a change, but I hear it’ll be amended in the next few days so that it would actually do the deed.)

Dave JonesJones issued a news release today saying he appreciates Blue Shield’s support of the federal Patient Protection and Affordable Care Act enacted last year, and of the health benefits exchange California is moving to enact under it by 2014. The law lets the Insurance Commissioner recommend which insurers will be allowed to sell insurance in this exchange, and “Blue Shield’s decision to refrain from a third rate increase is certainly consistent with their desire to participate,” Jones said.

“But one of the missing pieces of the federal healthcare reform is the authority to reject excessive rate hikes,” he added. “Today’s news is a welcome development and certainly a relief for several hundred thousand of Blue Shield policyholders in California, but it reminds us all that insurance companies hold all the cards when it comes to setting rates. Blue Shield policyholders still had to pay the first two rate increases. Those with health insurance are at the mercy of insurance company decisions to raise rates multiple times each year. That’s why we need to pass Assembly Bill 52.”

Feuer issued a statement today too, saying “(f)amilies and businesses should not have to depend on the whim of an insurance company to halt a major rate increase. Without a robust rate approval process in place, Californians will continue to experience these outrageous increases.”

Members of Congress were quick to weigh in on today’s developments as well.

Rep. George Miller, D-Martinez, the House Education and the Workforce Committee’s ranking Democrat, issued a statement calling Blue Shield’s withdrawal of its premium increase “good news for Californians who faced losing their insurance because of this rate hike. While California families are still suffering from the recession, they shouldn’t also have to worry about yet another hit to their pocketbooks.”

And Rep. Pete Stark, D-Fremont, the Ways and Means Health Subcommittee’s ranking Democrat, said Blue Shield is putting its money where its mouth is. “As one of the few insurers that has worked collaboratively toward health care reform, today’s actions show that its not just talk – they’re willing to put their money behind their words. I commend them for taking this action. While other insurers may be less willing to make moves like this voluntarily, the good news is that the tools enacted in the new health reform law will force them to be more honest and forthcoming.”


Pete Stark: Profitable insurers should cut premiums

Just as public opinion helped shape the battle over health care reform in 2009 and early this year, so will it affect Republicans’ upcoming effort to repeal the law that was passed.

Pete StarkRep. Pete Stark, D-Fremont, soon to lose his gavel as House Ways and Means Health Subcommittee chairman now that the GOP is set to take over the House in the next Congress, sent a letter today to the CEOs of 10 for-profit insurance companies to urge them to lower their customers’ premiums in light of higher profits.

The ten companies combined have announced a total of $9.3 billion in profits for the first nine months of 2010; that’s $2.1 billion higher than the first nine months of 2009.

“On average, your profits have gone up 41 percent from last year,” Stark wrote. “Health insurance premiums are eating up more and more of the budgets of working families. Over the past decade, premiums for workers and employers have more than doubled, while family incomes have remained stagnant. I call upon your companies to share the billions you are reaping in higher profits with your policyholders by lowering premiums. Please respond with your plans to pass these profits along to consumers. I appreciate your prompt response to this inquiry.”

“I haven’t heard back from any of them, I’m waiting anxiously for their reply,” he said dryly this afternoon. “We’ve been hammering on them just to hopefully embarrass them and show the public that the health bill features will in many cases force them to hold back their price increases, that’s one of the major benefits to the public at large.”

The Affordable Care Act in 2014 will establish a new competitive insurance marketplace including state-run health insurance exchanges where millions of Americans and small businesses will be able to purchase affordable coverage. Stark said that’s why some insurers want the new GOP House majority to repeal the bill.

“Guilt doesn’t work but the public’s indignation does,” he said. “They need to get the public to try to repeal the health bill and we need to keep the public from doing that. This is all about can we maintain the health care bill and benefits we believe it brings, that’s the basis for all of this … Now that were in the minority, I guess we’re fighting a different battle than we were six months ago, darn it.”

Stark wrote to the CEOs of WellPoint Inc.; Amerigroup Corp.; Healthspring Inc.; Health Net Inc.; UnitedHealth Group Inc.; Humana Inc.; Molina Healthcare Inc.; Centene Corp.; Aetna Inc.; and Coventry Health Care Inc. Some other insurers have acted more responsibly, he said, calling Blue Shield of California “an exemplary group, and Kaiser – Kaiser has been quite admirable. They’ve raised their rates but not unconscionably.”


Lee to host health care forum Friday in Oakland

Rep. Barbara Lee, D-Oakland, will host a discussion on the health care reform bill from 1 to 3 p.m. this Friday, April 30, in Evergreen Missionary Baptist Church, 408 W. MacArthur Blvd. in Oakland.

Lee’s office says she’ll be joined by “a diverse group of health care experts” speaking on how, and on what timeline, the new laws will affect people and families. Seating is limited, so please RSVP to HealthRSVP2010@mail.house.gov or (510) 763-0370.

The event should be an interesting bookend to the one she held last June at the very same church, at which she had urged progressives to keep demanding a single-payer health care system to ensure that any reform package passed by Congress would at least have a robust public option. In the end, of course, it had neither.


Stark, Miller urge insurers to ban rescission now

Hours after House leaders including two East Bay members sent a letter calling upon seven major health insurers to immediately end rescission – the practice ending someone’s coverage when he or she gets sick – ahead of new health care reform requirements kicking in soon, the nation’s largest health insurer did just that.

Wellpoint – parent company of Blue Cross and Blue Shield affiliates across the nation, including Anthem Blue Cross in California – issued a statement saying it will end the practice May 1.

“Rescissions, while rarely used, are one process insurers employ to reduce fraud and protect members,” the company said in its news release. “The standard contained in the federal legislation requires insurers not to rescind policies except in cases of fraud or intentional misrepresentation of material fact. WellPoint welcomes greater uniformity among insurers in this area.”

But although Wellpoint already had been the first insurer to embrace another part of the new health care reform bill – extending coverage to policyholders’ dependents up to age 26 – its move on rescission comes just one week after the company was widely berated for what many called an egregious abuse. Reuters reported the company had been using a computer algorithm that automatically targeted every policyholder recently diagnosed with breast cancer, triggering an immediate fraud investigation as the company searched for some pretext to drop their policies.

Among the House leaders who signed the letter to health insurers earlier today were Education and Labor Committee Chairman George Miller, D-Martinez, and Ways and Means Health Subcommittee Chairman Pete Stark, D-Fremont. Stark later issued a statement saying Wellpoint’s rapid response today means “the race is on.”

“WellPoint took the first step, now it’s up to the other insurance companies to show they’re serious about making health reform work,” he said. “They need to end rescissions, and put in place a system where every proposed cancellation is reviewed by an independent third party.”

UPDATE @ 11:19 A.M. WEDNESDAY: UnitedHealthcare announced this morning it’s also ending its use of rescissions immediately, ahead of the new law’s Sept. 23 impelementation date.
“In the spirit of the recently passed health reform legislation, UnitedHealthcare moved quickly to eliminate the practice of rescissions, except in cases of fraud or intentional misrepresentation of material fact,” said President Gail Boudreaux. “We continue to find ways to ensure that the new health care reform law can be implemented effectively for the benefit of all Americans and achieve broader access to quality health care.”


More health insurance oversight? Poizner says no

The national healthcare reform just signed into law by President Barack Obama will be a huge boost for low-income Californians and people of color now suffering a disproportionate lack access to care, but further state-level reforms are urgently needed, according to the Greenlining Institute, a Berkeley-based public policy and advocacy group.

The new law “doesn’t go far enough,” Greenlining health program manager Carla Saporta said in a news release. “We urgently need to pass state-level legislation such as AB 2578 so that we have the same sort of strict regulation of health insurance rates that California has now for auto insurance. Surely our health is at least as important as our cars.”

AB 2578 – which in a previous incarnation as AB 1554 passed the Assembly in 2007 but died in the Senate Health Committee, and as AB 1218 was nixed by the Assembly Health Committee last year – would force insurance companies to justify rate hikes to state regulators and require the state Department of Insurance or Department of Managed Care to approve any rate hikes over seven percent per year.

As Democrats declared victory this week in Washington, the Assembly Health Committee passed AB 2578 on Tuesday; Greenlining says continuing public anger over huge rate increases by insurers such as Anthem Blue Cross has helped the bill, too.

“Lack of health coverage is a true emergency for communities of color,” Saporta said. “Latinos, for example, have the highest uninsured rate of any racial or ethnic group, African-Americans are more than half again as likely to be uninsured as whites, and Asian and Pacific Islanders are more likely than whites to forego routine and preventative care due to costs. National health insurance reform will do a lot to help fix this, but the measure President Obama signed doesn’t do nearly enough to control insurance rates. Our communities urgently need the added protection that AB 2578 will give, and we hope the legislature will pass further consumer protections as well.”

Assemblyman Dave Jones, D-Sacramento – a Democratic candidate for state Insurance Commissioner – is a driving force behind this bill. Republican gubernatorial candidate and current state Insurance Commissioner Steve Poizner has said he favors better state regulation of insurers rather than the federal regulation contained in this week’s new health reform law. And Poizner has voiced outrage at Anthem Blue Cross’ rate hike.

But Poizner doesn’t support this bill, campaign spokesman Jarrod Agen said today.

“He believes that additional bureaucracy envisioned in the bill doesn’t deal with the fundamental problem of health care — rising medical costs. Steve is committed to lowering healthcare costs, but President Obama demonstrated with his healthcare bill that he is not the least bit interested in lowering healthcare costs for consumers,” Agen said in an e-mailed reply to my query. “Steve wants greater choice and competition in the healthcare marketplace through measures like reducing the number of mandates, increasing the use of electronic medical records, and giving consumers the freedom to purchase health insurance across state lines. He believes measures such as these, rather than more government incursion into our healthcare system, will make healthcare more affordable for California’s citizens.”


Now we’ll hear about it for the next eight months

The House has passed the Senate’s $940 billion health reform bill on a 219-212 vote, and the news releases are flying hot and heavy, as they surely will continue to do on this issue from now through November’s midterm Congressional elections.

From Rep. Jerry McNerney, D-Pleasanton:

Jerry McNerney“For nine months, I’ve been listening to our community’s thoughts and ideas on health care reform. I’ve held public events that hundreds of people have attended and have met with seniors, patients, veterans, small business owners, doctors, and nurses. Thousands of people have also emailed, written letters, and called my office.

“I’ve heard from people denied health coverage for preexisting conditions like diabetes and allergies. I’ve met seniors who can’t afford the monthly cost of prescription drugs. I’ve talked with small businesses owners who have been forced to lay off employees because of skyrocketing premiums. I’ve heard many heartbreaking stories about the struggle so many Americans face right now to afford health care.

“I’ve carefully reviewed the proposal, read every page, and listened to all the input that the people I represent have offered. Throughout this process, I’ve stood up for reform that will lower costs, give families security and peace-of-mind, and make sure people can choose their doctor and care.

“Today, we took a critical step towards making health care more affordable for American families and helping to guarantee our nation’s long-term economic prosperity. Reforming health care is a fiscally responsible course of action that will build on the best of the American system by making sure people can keep their current insurance if they like it and choose what doctors they want see.

“Reform will reduce the growth of health care costs by creating fair, transparent and competitive health insurance markets and cracking down on waste, fraud and abuse. It will improve benefits for seniors, help small businesses to stay open, and stop insurance companies from denying coverage for pre-existing conditions or kicking sick people off their plans.”

From Republican National Committee Chairman Michael Steele:

michael_steele“Californians have plenty of reason to be disappointed today, as Representative McNerney chose to continue siding with the liberal leaders in Washington and support this government takeover of health care. Rep. McNerney should be ashamed to have been part of this partisan trickery and underhanded tactics used to ram this bill through Congress. And even more so, he should be ashamed to have supported a bill that will force already struggling Californians to face a future of higher taxes, increased premiums and Medicare cuts.

“Americans across the country have made their voices heard and flatly reject this legislation loaded with special deals and tax increases, but Rep. McNerney did not listen to them and instead chose to force this bill through by any means necessary. Rep. McNerney can be sure that voters in his district will not forget this vote that will negatively affect Americans for generations to come, and this November they will be sure to send him packing.”

Many more voices, after the jump…
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