Calif. insurer tries to raise rates 59%

Nonprofit insurer Blue Shield of California submitted a proposal to raise rates on individual policyholders by as much as 59 percent beginning March 1.

Nonprofit insurer Blue Shield of California submitted a proposal to raise rates on individual policyholders by as much as 59 percent beginning March 1.

The San Francisco-based company said the increase was necessary because of rising provider fees, greater use of medical services by its members, and “the fact that healthier people are dropping coverage during a bad economy,” Johnny Wong, a company spokesman, said today in an e-mail.

The increase comes less than a year after WellPoint Inc.’s Anthem Blue Cross and Blue Shield unit tried to raise rates in California as much as 39 percent for those who buy individual policies. Eventually the company lowered the proposal to an average 14 percent increase. WellPoint executives were called before Congress to explain the plan.

“Even with these rate increases, Blue Shield of California expects to lose tens of millions of dollars on its individual health care business in both 2010 and 2011,” Wong said.

Wong said about 193,000 policyholders will see higher rates that will average about 30 percent. He could not cite a number for those who would face the 59 percent increase. Blue Shield of California has about 3.3 million members, he said.

The increases “have almost nothing to do with the federal health reform law,” and “reflect trends that were building long before health reform,” Wong said in the e-mail.