The Absurdity of a 59% Insurance Increase

I read with amazement that Anthem Blue of California wants to raise premiums by 59%.  My jaw dropped with absolute disbelief.  What possible legitimate reason could call for such a raise?  How can there be a raise when profits are up and the rate of inflation is not at 59%?

I know I am not an economist and don’t attempt to be an expert on rates of inflation and impact on business, but I know this, 59% is ridiculously high.  With such an increase in premiums, the cost will be out of range for many individuals and perhaps small businesses.  The other aspect is the policies will have increased deductibles, copays and coinsurance.

I wanted an idea of what the potential cost would be so I went to the Anthem website and put in information to get a quote.  As an individual, I was offered four policies.  I went through each one.  On the surface the first two were cheaper but offered much less with higher deductibles, coinsurance and out of pockets which did not include the deductible and NO Maternity.  The cheapest was $346.00 and with a 59% raise it will cost $550.14.  The next was $351 and with the 59%, it will be $558.09.  The difference in these two plans was the deductible was $6,000, 25% coinsurance and a $4,000 out of pocket limit not including deductible. Copays are $30 for PCP (only 4 paid for until deductible is paid) and $50 for specialist.   That translates as a total of $10,000 before the insurance pays for everything. Premiums annually total $6,697.08, add the $10,000 and it totals $16,697.08.

The next two policies were $723 and $784.  With 59%, it is $1,149.57 and $1,246.56.  The later one, had a $3500 deductible, 30% coinsurance, $40 copay and $4,000 out of pocket not including deductible.  It is my guess this policy is for anyone who has some pre existing condition the insurance company is willing to overlook.  One would think, with the premiums so high, the benefits would be better but it is not the case.

I know how to read a benefits policy and I am surprised at how the the insurance companies are continually shaving off benefits.  These policies offer basics at a high cost.  So much is being laid at the feet of the consumer.  A reminder to the consumer, the only reason  insurance companies are not charging for physicals is because it is the law under the new healthcare law.

I would like to see on paper the justification for this rise.   Medical costs have not increased 59% and healthcare reform is not the cause.  The question is, Will California Insurance Commission and/or the state legislature be able to stop this increase.  I hope so because many people will not be able to make the adjustment and bankruptcies will increase.