Year-after-year, self-employed small business owners and others who purchase health insurance on the individual market have been hit with large rate hikes from Blue Cross Blue Shield of New Mexico.
Last Wednesday, many took time off from work to speak out at a hearing regarding the latest round of rate hikes of up to 26.2%. The increases are the result of a settlement made by the state Division of Insurance, the state Attorney General and Blue Cross. Residents told regulators how years of rate hikes have left them paying hundreds per month for high deductible insurance.
CU spoke on behalf of policyholders, arguing that the state should require more justification for the hikes, and require Blue Cross to spend more premium dollars on medical care. But it‘s doubtful residents will get the relief they need.
The Division of Insurance and Attorney General’s office both failed to oppose the rate hikes regardless of expert witness testimony pointing out flaws in the approval process and a lack of underlying data to justify the increases. The Attorney General’s office stood by the settlement, arguing that it was the best deal the state could get for consumers at the time.
Consumers Union recently pointed out how some nonprofit insurers are building surplus profits far above the required amount. In fact, nonprofit mutual insurer Healthcare Service Corporation, of which Blue Cross Blue Shield of New Mexico is a division, amassed more than $6.7 billion while repeatedly raising rates. What’s worse is that the company wants to impose these large increases on individual market consumers even though it has almost doubled profits this year from the same period as last year with surplus growing another half of a billion dollars.
The hearing was the culmination of a ten-month saga that’s left New Mexicans frustrated and furious. Last November, Blue Cross proposed average rate hikes of 24.6%, and, with little required justification, the state Division of Insurance approved the increases. Public outcry forced the Division to schedule a hearing and the Attorney General stepped in to advocate for policyholders. But, to the dismay of New Mexicans and Consumers Union, prior to the April 26 hearing, state officials struck a back room settlement deal with Blue Cross to reduce the proposed increases by just 3.3%. This outraged policyholders even more, and resulted in a new hearing held on August 25 to determine if the settlement is fair.
Blue Cross did everything it could to prevent New Mexicans from getting a fair hearing. The company hired the state’s former Attorney General to represent it. Company lawyers tried to suppress evidence in the case, and even sued to stop the hearing, but the state Supreme Court ruled that it go forward.
Executives for Blue Cross came to the hearing surrounded by bodyguards. At the end of the testimony, they got up and left before consumers had a chance to speak. “Where are they going? Why are they leaving now?” the audience members shouted.
The New Mexico rate increases demonstrate exactly why we need strong regulators to stand up to companies who aren’t acting in the best interest of policyholders. A final decision on the rate hike is expected in six weeks. Unfortunately, in New Mexico, rate payers may get no relief from these unjustified premium hikes.