Victoria Colliver, Chronicle Staff Writer
San Francisco Chronicle
Thursday, March 3, 2011

A year after Anthem Blue Cross created a public uproar by proposing rate hikes as high as 39 percent, the health insurer is at it again.

Many Anthem policyholders who buy their coverage as individuals say the company has notified them to prepare for another rate increase effective May 1. This would create a cumulative rise in rates in excess of 40 percent for some consumers in less than a year.

San Francisco resident Alison Heath and her husband will have to pay 26 percent more beginning in May, along with higher co-payments and deductibles. That’s on top of a 16 percent increase last year. Heath figures she and her husband will be paying about $17,700 a year for health insurance.

“I almost feel like I’m a victim of a crime,” said Heath, 55, who doubts she could find alternative coverage because of minor pre-existing conditions. “It’s like I have a gun to my head. I have to pay because I’m not willing to live without insurance.”

This time a year ago, Anthem, which is based in Woodland Hills (Los Angeles County), unwittingly helped intensify the debate over national health legislation by proposing rate hikes as high as 39 percent for its 700,000 individual California policyholders and giving the law’s proponents some key talking points. A review commissioned by the state Department of Insurance later found mathematical inaccuracies in Anthem’s rate filings, and the insurer scaled back its increases.
Focus on Blue Shield

More recently, Blue Shield of California has taken center stage by proposing cumulative increases for some of its 200,000 individual policyholders that topped out at 59 percent.

The two insurers are not the only health insurers imposing rate hikes. Aetna customer Dean Donovan said he just received a notice that his rates would go up 11 percent in May, following a 28.5 percent jump in September.

Donovan, of San Carlos, suspects that health insurers are trying to get their licks in when they can, before the new health care law fully takes effect.

“They are trying to get as many of these increases in place before 2014,” he said. “If the new health care act is in force, they will be unable or less able to do this.”
Runaway costs cited

Anthem and other health insurers insist runaway medical costs have forced them to raise rates. Blue Shield and Anthem both said they lose money on their individual policies and that their new rates were reviewed by an external actuary and found to comply with the law.

“The rate increases in the individual market are not unique to Anthem, but rather represent an economic reality faced throughout the entire industry and reflect the fact that health care costs continue to escalate faster than the growth of premiums,” the company said in a statement.

Glenn Karpf, 45, a self-employed architect in Berkeley facing a 17.5 percent rise in May, is skeptical.

“My premium doubled in about four years,” he said. “There is just no way health care costs have gone up like that. I just don’t buy it.”
A temporary delay

At the request of the state Department of Insurance, four health insurers, including Anthem and Blue Shield, agreed recently to delay planned rate increases for 60 days to allow the department to conduct a review of their proposals. That review has yet to be completed.

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