I would have gotten to writing this sooner but I've been talking/emailing with many of my clients today about the Los Angeles Times story today talking about Anthem Blue Cross's March 1 rate increase. The story is claiming an average of 30-39% in increases.
First of all, we all know the media loves controversy and shock value. As usual, they skipped a couple of things. Don't get me wrong, just because I sell health insurance doesn't mean I agree with all the carriers say and do. Independent agents like myself want to see some changes in how health insurance works because we spend a lot of time trying to get people covered, trying to appeal above standard rate increases and declines, then we have to take cover when the increases hit.
I pulled out my Anthem list of March 1 increases to see how many of my people are in the 30-39% range--none of them. Anthem has gone to 'anniversary date' ratings recently so that the increases don't all hit on March1; it's tough for them and for agents trying to help their clients. Otherwise I would have had about 60 people calling me. So out of my 12 people getting increases this month, three are dental plans only, and those increases are from 5-13%. But that's dental you say, so what?
Well of my nine increases that were from medical, the lowest was 10%, from $100 to $110 a month. My highest was 26%, from $331 to $443/month. Now that hurts. If you have something like that happen contact your agent to see if there's something more cost effective for you.
Two more things about this article in the LA Times--it talks about how it can be dicey to change carriers if you have pre-existing conditions--true! Never cancel your current coverage until you have confirmation that your application has been approved! I've had clients go ahead a do it, thinking that the item they didn't tell me about didn't matter, and it may.
It also talks about an 'eightfold increase' in company profits in Q4--that's a little misleading if you aren't accustomed to reading financials. This resulted from the sales of some subsidiaries, which is a one time revenue source, so not likely it will repeat since you can usually only sell your subsidiaries once. It would be different if it were from new sales and decreased expenses.
One thing the article didn't mention is that Anthem now has a 12 month rate guarantee on new policies. So if you were approved effective February 1, this March 1 increase wouldn't hit you until next February, your anniversary date. They recently discontinued a two year rate guarantee that was offered on a handful of higher deductible plans--no one was doing two year guarantees, so hats off to them for that little experiment.
Next--what did the article mean when it said about 2.1 million Californians are covered by individual plans and 21 million by HMOs; why this doesn't make sense.
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