As health insurance premiums rise sharply, lawmakers and consumers face tough choices

Steep increases in individual health insurance premiums are sparking reactions across the country.

San Francisco Chronicle: "Sen. Dianne Feinstein said Friday she'll introduce legislation next week that would give the federal government the power to review and deny large rate increases by health insurers in states like California that lack the authority to regulate premium increases. Feinstein, D-Calif., has joined President Obama and other elected officials in seizing on the proposed 39 percent rate hikes proposed by Anthem Blue Cross on some of its individual members in California to reenergize the debate over national health legislation."

"'This is unconscionable,' Feinstein said in a statement about Anthem's increases. 'It places a huge burden on people who are already struggling in these tough economic times, including the estimated 700,000 Anthem Blue Cross policyholders in California'" (Colliver, 2/20).

Mercury News: "While [California] Insurance Commissioner Steve Poizner is investigating the company's plans, his office is largely powerless under California law to stop the rate increase from happening. ... The senator's legislation would empower the secretary of the Health and Human Services Department to draft criteria for deciding whether a rate hike was justified, and then to block or modify a premium increase if it was deemed excessive" (Zapler, 2/19).

The Associated Press/MSN: "Maine's dominant health carrier, Anthem Blue Cross and Blue Shield, was denied an 18.5 percent increase for individual policies last year and is now requesting that state regulators approve a 23 percent rise. Public comment sessions are scheduled for Monday and Wednesday on the Anthem request and for MEGA Life and Health's request for an increase of 21 percent in its small group policies and 12.5 percent for its individual policies" (Adams, 2/20).

Hartford Courant: "A new report points to the proposal last summer by Anthem Blue Cross and Blue Shield in Connecticut to increase premiums by 23 to 32 percent for people under 65 who bought individual plans. ... After an outcry by consumers and public officials, the state insurance commissioner rejected the rate hike. The state Department of Insurance instead recommended increases between 13 and 20 percent. Insurers have long said they are increasing premiums to keep pace with skyrocketing medical costs — higher prices for services, and higher rates of use by patients."

"Medical costs — everything from doctor fees to pharmaceuticals and new medical machines — increase 15 to 20 percent annually. Requested rate hikes were 19.5 percent on average, and the insurance department approved increases of 17.1 percent on average between, 2007 and 2009" (Sturdevant, 2/20).

Los Angeles Times: "Health insurers across the country are dramatically increasing rates and slashing benefits for many of the estimated 17 million consumers with individual insurance policies, while making it almost impossible to obtain affordable alternatives."

"Rate increases are forcing many policyholders to make undesirable choices. In an effort to reduce their rates, many consumers are raising deductibles as high as $7,500 and paying more out of their pockets for basic services. Others are avoiding visiting doctors for fear of tainting their medical histories. Some are canceling their coverage altogether. And it's not only people with serious conditions, such as cancer and diabetes, who have a hard time navigating individual markets. A variety of preexisting conditions -- such as ear infections, varicose veins and sleep apnea -- make others just as vulnerable" (Helfand, 2/20).

In a separate story, the Los Angeles Times reports on what it calls "a cautionary tale" of insurance reform: "Spurred by heart-wrenching stories of sick people denied health coverage, the state of New York did what many of President Obama's critics say he should do now -- it passed a relatively simple law requiring insurers to accept all applicants. ... But two decades later ... premiums in New York are now the highest in the nation by some measures, with the average individual health costing about $9,000 a year."

"The state has become a victim of a dangerous dynamic in insurance markets. Laws allowing consumers to buy insurance at any time often saddle companies with a lot of high-cost customers. That in turn drives up premiums, pushing away younger, healthier people who are vital to a functioning insurance system" (Levey, 2/21).