Cal., Wash. pass health insurance rate increases; federal grants could help consumers

By Megg Mueller on February 1st, 2011

Individual health insurance customers in California and Washington could be taking a big hit soon. Insurance commissioners in those states have approved significant health insurance rate hikes requested by major providers including Blue Shield and Anthem Blue Cross, with some health insurance rates set to climb almost 24 percent.

Anthem Blue Cross rate hike approved

In California, Anthem Blue Cross had asked for a 39-percent rate increase in February, but an actuarial firm found math errors in Anthem's proposal, which led the insurer to withdraw the massive increase. Anthem reapplied, and in August, the California Department of Insurance agreed to an average rate hike of 13.5 percent for Anthem, and an average increase of 18.8 percent for Blue Shield of California, according to the Sacramento Business Journal. These increases went into effect Sept. 1.

Washington follows suit

In the state of Washington, most insurers that offer individual health insurance have received approval from the state's insurance commissioner to raise premiums on Oct. 1, The Seattle Times reports. Group Health Cooperative was approved for an average increase of 7.8 percent, while Asuris Northwest Health, a subsidiary of Regence Blue Shield, topped the list with an average rate hike of 23.7 percent.

While no one likes to see their medical insurance rates go up, residents of Washington and California may be in better shape than average, because those states are among the roughly half of U.S. states that have regulatory controls in place that could keep the increases from being even higher. States such as Illinois, Louisiana and Montana, according to a story in USA TODAY, have no authority to approve or deny rate hikes.

Government lends a hand

Many states are hoping that their share of $46 million in federal grants will help them minimize these hikes. Part of health care reform, the grants are intended to help states increase regulatory control, hire rate experts, and increase insurance company transparency by posting financial documents on the Internet. California has already made such postings available to the public on the California Department of Insurance website.

The District of Columbia and 45 states have each applied for the grant of $1 million per state. While a million dollars is a lot of money to most of us, it remains to be seen whether state governments will be able to use those funds in a way that ultimately saves consumers money on health insurance quotes.

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