Blue Cross seeks rate increases for nongroup policyholders

Independence Blue Cross is seeking rate increases in the 20-to-50 percent range for 33,000 nongroup policyholders.

Although that's less than 2 percent of the two million IBC policyholders in the Philadelphia region, they tend to be those who do not have coverage through their employers and would be more likely to go uninsured if they decide that they can't afford health-insurance premiums.

"What they're paying now doesn't cover what we're paying for their medical expenses," said IBC spokeswoman Elizabeth Williams, the company's vice president for corporate and public affairs. " . . . The real problem here is the escalating cost of medical care."

The proposed boosts, now pending before the state Insurance Department, were disclosed yesterday by two critics - the city's consumer advocate, Lance Haver, and Marc Stier, the Pennsylvania director of Health Care for America Now, a nonprofit coalition supporting the Obama administration's health-care initiatives.

Haver said that he learned of the proposed increases over the weekend by reading a formal notice published in the Pennsylvania Bulletin, a collection of announcements by the state government.

Williams confirmed that IBC had filed for the increases without any public announcement or notice to the affected policyholders. It is the company's practice, she said, to wait until the state Insurance Department takes action on the rate requests and then notify policyholders.

IBC asked for the increases to take effect July 1.

Melissa Fox, a spokeswoman for the state Insurance Department, said the public would have about 30 days to comment on the rate request. State officials would then review the filings and act on IBC's requests.

"Our own actuaries on staff will look at their information, and establish a back-and-forth dialogue if there are other questions we have," Fox said. "Generally speaking, it takes anywhere from 30 to 45 days, but if more time is needed we will take it."

The proposed rate increases would affect three different groups of IBC policyholders:

* Nongroup Personal Choice subscribers, a group of about 20,000 customers ranging from singles in their 20s to families with children. The lowest rate in this category, for a single person under 29 years old, with standard-option coverage, would climb from $162 a month to $207 a month. The highest rate, for a family with high-option coverage and adults over 60 years old, would climb from $2,567 a month to $3,214 a month.

"These are plans we offer to anyone, regardless of their health," Williams said. "No matter how ill you are, we will insure you. We're the only insurer in this market who offers this kind of plan."

* Nongroup Special Care Hospital coverage. Williams said the plan was developed for low-income households, now covering about 10,000 people. They'll face a 27 percent increase in insurance costs.

* Nongroup Basic Blue Cross Hospital coverage. Williams said the boosts would affect about 2,800 people, mostly elderly, who would face increases ranging from 24 to 43 percent.

Haver, speaking for himself and not the Nutter administration, criticized the insurance industry's model for setting premiums.

"Instead of spreading the cost of administering insurance and providing health-care costs over a large pool of people, Independence Blue Cross and other private insurance companies seek to make a profit on each of the many plans they provide to businesses and to individuals," he said. "This dramatically drives up costs, especially for small businesses and those who purchase insurance in the nongroup market.

"These rate increases are so high that it looks like Independence Blue Cross would rather not insure anyone in the nongroup market."

Williams said that IBC insures 48,000 different groups, each with different charges based on the medical costs of the group. Nearly 97 percent of the groups have fewer than 100 employees.

Haver said he had asked the state insurance department to schedule a public hearing where IBC officials could be cross-examined about their finances but had not heard back from the state. *