That’s the number of rate increases that Blue Cross Blue Shield of Texas filed for their individual insurance policies to go into effect between January 2007 and May 2010. To be fair, they spread these increases out amongst as many as twenty-five different individual insurance forms. It doesn’t take a mathematician though to quickly figure out that BCBS of Texas is raising rates multiple times per year on many of their individual policies. It did however take an open records request filed to the Texas Department of Insurance to dig up this information.
The individual market may best be referred to as the “no man’s land” of health insurance. It’s the place where most entrepreneurs and small business owners are banished to purchase coverage. These Americans, often referred to as the backbone of our economy, lack the benefit of a major employer with a human resource department whose job is to make sure employees get a good deal and understand how their insurance policy works.
If you shop around for individual health insurance and find something you think is a good deal, you may not have that deal for long because rates can and will go up. Texas is a “file and use” state for health insurance rate increases. This literally means that to raise rates a company simply must submit a form with the Texas Department of Insurance, pay a fee not to exceed $100, and then start charging customers more money. One woman wrote to us describing how in just two years, from 2007 to 2009, her BCBS policy increased by 29.1% while her income remained the same.
Recently passed healthcare reforms aim to reduce rate hikes like these by requiring that insurers spend at least 80% of premiums on actual healthcare. This provision, which goes into effect in January 2011, should force companies to use premiums for medical care as opposed to CEO salaries or profits for investors or big marketing campaigns. If insurers fail to meet the minimum standard, they’ll have to provide rebates to policy holders. Additionally, the new healthcare law gives states a path to decide that some rates are “unjustified” and limit insurance companies from selling policies with these unjustified rate increases in the new exchanges, set to debut in 2014.
In the meantime Texas policyholders are forced to endure double-digit rate increases as BCBS continues their year’s old practice of hiking rates beyond medical inflation. In the Dallas-Fort Worth area medical inflation averaged around 4% for years 2007 through 2009, however, BCBS issued rate increases as high as 30% for plans sold in Texas during this same period. At a minimum it’s time for insurance companies to start explaining these rate increases and for consumers to stand up and say we’ve had enough. The new healthcare law makes the first step possible, share your rate increase story with us and do your part to help stop these abuses.