Some healthy individual health coverage holders are dropping their coverage, and that shift is contributing to soaring individual health rates in California, Blue Shield of California says.
California Blue, San Francisco, has asked for permission to raise rates as much as 59% for some holders of individual coverage, and it has asked for permission to raise rates an average of 30% to 35% for a total of about 195,000 holders of individual coverage.
"The rate increases reported today cover a period of more than one year and have almost 
nothing to do with the federal health reform law," California Blue says in a statement.
Rates are rising rapidly partly because of increases in provider prices, partly because of increased use of health care, and partly because of "the fact that healthier people are dropping coverage during a bad economy," the company says.
"Even with these rate increases, Blue Shield of California expects to lose tens of millions of dollars on its individual healthcare business in both 2010 and 2011," the company says.
The Affordable Care Act will require insurers to spend at least 80% of premium revenue on health care and quality improvement in 2011, and California Blue believes its new, higher individual rates will meet that threshold, the company says.
Successful implementation of the federal Affordable Care Act could help the situation, by keeping healthier people in the private health insurance system, California Blue says.
California Blue provides coverage for 3.3 million California residents. It is not affiliated with WellPoint Inc., Indianapolis (NYSE:WLP).
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