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Statement of Consumer Don Lapin Regarding Unfair Health Care Insurance Rate HikesStatement of Don Lapin - 12/17/02
I have been a Blue Shield Individual PPO customer since 1995, at which time my premium was $70 per month. In the ensuing 7 years my premiums have tripled while my real insurance benefits have gone down:
*The deductible has increased from $1000 to $1500.
*Copayments have increased from 20 percent to 30 or 40 percent, depending upon the provider.
*There is now a $250 deductible for brand name medicines.
*One rate increase notice has followed another, sometimes with two notices in the same year.
The rate increase notices are accompanied by a stack of endorsements, full of detailed, confusing clauses changing the terms and conditions of coverage.
Blue Shield also tries to distract members from the cost increases by offering new benefits that I didn't ask for, like toll-free hotlines, health magazines, and web site features. A month or before this latest increase I got a refrigerator magnet as part of my benefit package.
When the Blue Shield notice for this year arrived, I saw that the increase was 25 percent, from $199 to $249. As a cost-saving measure, I decided to investigate the price for a higher deductible of $2,000.
For my age bracket, the cost on Blue Shield's web site was $140 per month. When I contacted Blue Shield, however, I was told that $140 was only for someone with a "squeaky-clean" medical history. Apparently I am a "Tier 2" subscriber, and a rate of $175 would apply in my case.
I also tried to obtain coverage through Kaiser's HMO system, at approximately $200 per month, but was turned down due to pre-existing conditions.
The rapidly-changing, voluminous terms and conditions of this policy make it very difficult to compare it to competing policies from other companies, assuming that another company would even grant me their advertised policy.
Health care in California is another example of a private industry that has been allowed to run amok with little or no regulation.
The health insurance market is not really a market at all - anyone who doesn't have a "squeaky-clean" medical history is stuck with whatever changes in price and conditions of coverage that the insurance vendor wants to make.
Insurance vendors should be required to publish realistic, average or median customer rates on their web sites, not simply those rates for "squeaky-clean" individuals.
Insurance vendors should also be required to reveal what percentage of dues payments go toward actual medical services and how much goes to advertising and overhead.
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