California Medical Insurance – October Rate Increases

If you are still getting used to the new laws that went into effect at the end of September 2010, brace yourself for another change—October rate increases on California medical insurance.?? In the Spring of this year, Blue Cross announced they would raise premiums for individual policies as much as 39% on July 1.?? Because of outraged cries from California insurance holders all the way to Capitol Hill, the company backed down and decided not the raise the rates—at least not at that point.?? Since then, auditors hired by the California Department of Insurance discovered several mathematical mistakes in the estimations used by Blue Cross to validate their proposal for increasing rates.

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However, the fear of rate increases did not die.?? Unfortunately for residents of California, this state does not have an Insurance Department that can legally stop health insurance companies from increasing their rates, even if they are found to be unwarranted or irrational.?? All that regulators are legally allowed to do is ensure that 70% of the premiums paid by insurance holders go toward paying the insured's medical services.?? Because the proposed October rate increases from Blue Cross fit within this parameter, there is nothing that California medical insurance holders can do.