Blue Shield of California withdraws planned rate hike

Part of the reason for the decision may have been the result of political and public pressure, but an unexpected development may have made the retreat easier for the company to accept — it's paying out less than expected for claims.

Los Angeles Times: Blue Shield Cancels Rate Hike
Blue Shield of California's decision to cancel a big rate hike for nearly 200,000 people followed mounting pressure from the public and political leaders. But an unforeseen factor may have made the retreat easier for the company to accept: It's paying out less for medical claims than it had anticipated (Helfand, 3/16).

California Healthline: Blue Shield's Rate Motives Explained
Could Blue Shield of California's motivation for making an about face on its proposed May 1 rate increase have anything to do with California's new Health Benefits Exchange, slated to launch in 2014? Blue Shield officials say no. However, whether intended or not, the decision probably won't hurt the company's relationship with the state's Department of Insurance. Legislation creating California's new exchange grants the state insurance commissioner authority to recommend insurers to the exchange based on the equity of their rate increases. Blue Shield officials said retreating from the proposed rate hikes will allow the company to more freely address issues causing medical costs to rise (Edlin, 3/16).

Reuters: Blue Shield Calif. Withdraws Planned Rate Hikes
Blue Shield of California, a nonprofit health insurer, has withdrawn plans to raise rates for its individual and family policies this year, citing a commitment to make reform work and keep costs down. The insurer, which has 340,000 individual and family-plan members in California, had filed with state officials earlier this year to raise rates by as much as 59 percent. Blue Shield said the previously proposed increases reflected a two-year cumulative average increase of about 30 percent (Beasley, 3/16).

The Sacramento Bee: Blue Shield Drops Latest California Rate Hike
Angry ratepayers found some relief Wednesday when Blue Shield of California dropped its plan to further raise insurance rates on hundreds of thousands of its customers in 2011. Hikes that average 6.5 percent were set to go into effect in May and would have been the third since October levied by the San Francisco-based health insurer (Smith, 3/17).

The Hill: Blue Shield Of California Drops Controversial Rate Hike Proposal
Blue Shield of California ended a drawn-out battle over rate hikes on Wednesday by withdrawing its proposal to increase premiums in the individual market following an avalanche of political criticism. Instead, the health insurer announced that it will keep rates flat through the rest of the year for its 340,000 individual and family plan members. The company said in a statement Wednesday that the decision would save consumers $35 million to $40 million this year, while costing the company tens of millions of dollars (Pecquet, 3/16).

The New York Times Prescriptions Blog: California Insurer Retreats On Raising Rates
Blue Shield of California, a nonprofit health insurer, said on Wednesday that it would no longer seek a rate increase this year for individuals who buy coverage on their own rather than through an employer (Abelson, 3/16).

Modern Healthcare: Calif. Blues Drops Planned Rate Hike
Blue Shield of California has withdrawn a premium rate increase for its 340,000 individual policyholders and says it won't raise rates for the rest of the year. The San Francisco-based not-for-profit insurer has been under scrutiny over the rate hike since January, when incoming California Insurance Commissioner Dave Jones asked Blue Shield to delay a planned March rate increase for 60 days. Blue Shield then conducted an independent actuarial review that found the rate hikes to be appropriate (Vesely, 3/16).

And in other news related to the health insurance industry:

The Associated Press: GAO Report Shows Success In Health Insurer Appeals
Don't take no for a final answer when a health insurer rejects a claim and leaves behind an unpaid medical bill. As many as 50 percent of some appeals prompt insurers to reverse their decisions, according to a report from the Government Accountability Office (3/16).