Projo 7 to 7 News Blog

Subscribers to Blue Cross' Direct Pay plans will see no increase in their premiums, after the state today rejected the health insurer's proposal to raise rates an average of 5.9 percent. Blue Cross said it would not appeal the decision.

Direct Pay covers people who don't have access to employer-based health insurance, typically the self-employed, unemployed and early retirees. Blue Cross & Blue Shield of Rhode Island is the only insurer offering such coverage in Rhode Island, and its rates must be approved by the Office of the Health Insurance Commissioner. About 14,000 people are enrolled in the four different Direct Pay plans.

Commissioner Christopher F. Koller objected to Blue Cross' plans to use almost half of the rate increase to boost its reserves, saying that the insurer has already put enough money aside. And he noted that Blue Cross has been making money on Direct Pay over the last couple of years despite requests for large rate increases.

"Direct Pay members, who purchase their insurance entirely with their own after-tax money, should be the last group of subscribers who should be asked to contribute to Blue Cross' reserves," Koller said in a statement.

Koller warned, however, that Direct Pay enrollees were likely to see rate increases next year because the cost of medical care continues to soar at two to three times the rate of general inflation.

Chet Lasell, Blue Cross spokesman, said the insurer was "disappointed" about the decision but would not appeal. "Given this economic climate, we understand the rationale behind OHIC's decision," Lasell said.

Lasell said that the increase, which would have taken effect April 1, was "actuarily justified." He noted that it was considerably lower than in previous years because of Blue Cross' successful cost-control efforts, including requiring preauthorization for MRIs and CT scans and managing the use of costly new medications.

Such measures, he said, "helps us to lower our costs, which are passed down to members through [lower] rates."

Koller attributed the lower costs to a higher proportion of healthy people enrolling in Direct Pay. John Cogan, a lawyer and executive assistant in Koller's office, said that officials were surprised at how much money Blue Cross was making on Direct Pay.

"Over the last two years, their requests for a rate increase have been overstated," he said.

 Tags  Blue Cross health insurance health insurance rates

Comments

Marcus said:

My Blue Cross went up over 2500 dollars this year. What the hell is going on here ??? Are we rate payers having to pay for every non-insured person who shows up at the hospital ??? I have 2 kids , i have to take care of them , i can't afford this anymore. We need fairness and to pay OUR fair share for our own families. It's other people's responsiblity to pay for THEIR own family's health care. !!!

Link | February 19, 2009 9:13 PM
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