In another sign of dysfunction in the U.S. healthcare system, Blue Shield of California has levied three rate increases in rapid succession that could raise some premiums as much as 59%. New state Insurance Commissioner Dave Jones has said he plans to scrutinize the increases, and that's a good thing, given that Anthem Blue Cross sought a huge increase in premiums last year based on faulty math. But Blue Shield's request also highlights why the country should stay the course on healthcare reform.
The three increases announced by the insurer, the last of which would go into effect March 1, would collectively raise rates 30% on average for people who buy coverage individually. That's a much higher jump than in the premiums for group insurance policies and a significantly larger increase than the overall rate of healthcare inflation.
Critics of last year's healthcare reform bill argue that Blue Shield's move is a direct consequence of Congress' meddling. That charge is easy to dismiss. Blue Shield has made it clear that only a small portion of its increase in costs is attributable to the added benefits required by the law.
Rather, the company said, the main factors are increased fees for doctors and other care providers and the growing demand for treatment by the company's customers. What that reflects, though, is that Blue Shield is attracting fewer healthy customers for its individual plans, leaving fewer people to shoulder the rising burdens.