California Insurance Commissioner Dave Jones criticizes Blue Shield rate increases
California Insurance Commissioner Dave Jones is criticizing Blue Shield of California for “unreasonable” rate hikes, a charge the insurer denies.
Jones will hold a news conference in Los Angeles on Thursday to discuss the increases, which run as high as 19.9 percent. The new rates could affect about 268,000 Blue Shield policyholders, according to a statement issued by Jones’ office.
Under state law, Jones does not have the power to block rate hikes by health insurance companies. He requested that Blue Shield reduce its increases, which were filed with the state on March 1. But the health insurer denied his request, said the Department of Insurance statement, which asserted that lower rates would have saved Blue Shield policyholders as much as $16.5 million.
Blue Shield spokesman Steve Shivinsky wrote in an e-mail that his company “worked tirelessly with the Department of Insurance to address all of their questions and concerns,” but “unfortunately, we could not agree.” Blue Shield believes the increases are reasonable, he wrote.
Shivinsky noted that Blue Shield’s average rate increase is 11.7 percent. He argued that the insurer’s increases “are lower than recent rate increases approved for most of our major competitors,” and that they were necessary to keep pace with the rising costs of hospital and physician services, prescription drugs, and diagnostic tests.
Shivinsky said he could not discuss the details of the negotiations with Insurance Commissioner Jones, and added that he does not know how Jones’ office arrived at the $16.5 million figure for prospective savings for Blue Shield customers.
The Blue Shield spokesman also said that his company “has lost tens of millions of dollars in the individual market in recent years and we expect similar losses in 2013.”
Insurance Commissioner Jones has criticized rate hikes by several health insurers since assuming his position two years ago.