Two of California's largest insurers have been selling health coverage intended to be a safety net for the state's sick and jobless at premiums that exceed state-issued rates, in some cases by thousands of dollars a year.
Two other companies -- Aetna and Health Net -- uniformly adhere to the state-issued rates. But a Times investigation found that Blue Shield of California's premiums are as much as 55% higher. And those charged by Anthem Blue Cross have been as much as 36% higher.
For The Record
Los Angeles Times Thursday, February 19, 2009 Home Edition Main News Part A Page 2 National Desk 1 inches; 37 words Type of Material: Correction
Health insurance: An article in Wednesday's Section A about safety-net health insurance rates gave an incorrect phone number for Anthem Blue Cross members to call about coverage. Anthem's customer service line can be reached at (866) 636-8991.
The rates affect more than 13,000 people with Anthem coverage and more than 6,000 with Blue Shield policies.
When the higher rates were pointed out to Anthem, the company said it had erred and moved swiftly to make amends. In contrast, Blue Shield defended its rates. It said it was not required to follow the state-issued rate structure because the company did not believe it was legally binding. It also said it reports its rates annually to the state.
Regulators acknowledged that they had not scrutinized these premiums for years. But they have recently opened investigations.
The coverage at issue was established in 1996 by the federal Health Insurance Portability and Accountability Act, or HIPAA. A key goal was ensuring that people who lost their jobs were able to remain insured. HIPAA works in tandem with COBRA, a federal law that extends job-based group insurance coverage, entirely at the individual's expense, for up to three years after a person leaves or loses a job. (COBRA stands for Consolidated Omnibus Budget Reconciliation Act, the 1986 law that created the program.)
Under HIPAA, insurers must offer their most popular coverage options to people whose COBRA coverage has run out, regardless of pre-existing conditions.
The higher premiums charged by the California insurers, which vary by the policyholder's age and region, add up. For example, Blue Shield's monthly premium for a family of four in Los Angeles with a 40-year-old primary policyholder is $1,461. That's $401 a month, or $4,812 a year, above the cap.
Anthem's 2009 monthly premium for the same family was $1,356 -- $296 a month, or $3,552 a year, above the cap.
In response to The Times' findings, Anthem initiated a review and discovered errors in its rates, spokeswoman Peggy Hinz said.
