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Rate Hikes Delayed For California Health Insurance
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Blue Shield Delays Hikes for Medical Coverage After Public Outcry
Insurance giant Blue Shield has agreed to delay rate hikes for their California health insurance for 60 days, as per the request from Insurance Commissioner Dave Jones.
This most recent rate increase is projected at just over 6 percent, and while that doesn't sound like much this is the third increase since October 1st of 2010. In October premiums for California medical coverage from Blue Shield went up 19 percent, and then again in January for about 4 percent.
In every case such rate hikes pertain to individual policies - Since individual policies are already more expensive than group plans or employer provided health insurance, many of those who shop for individual insurance in California are struggling to keep their medical coverage at all.
Blue Shield of California has claimed that the rate hikes are related to the economic struggles across the country, and particularly in California. Healthier people are dropping their coverage because they can't afford it, leaving the insurance company to cover costs for sicker and more expensive people.
Around 200,000 people purchase Blue Shield's California health insurance. Many of them are small business owners who don't have the bargaining power of larger corporations.
Nurses' groups have also been protesting the insurance giant for a high number of claim rejections. One consumer's advocate group argues that Blue Shield rejected over 20 percent of their claims in the first quarter of 2010. A spokesperson for Blue Shield says that this is because the insurance company has a different means of calculating what does and does not constitute an eligible claim for medical coverage.
While the state's insurance department does not have the power to deny rate hikes, they do have the power to audit California health insurance costs. Legislators and protestors are hoping that increased transparency will lead to fewer rate hikes and more careful calculations of insurance costs by insurance companies themselves.
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