The discussion was about the "controversial" premiums hike that Anthem Blue Cross was implementing on some of its subscribers. When I brought this up, she was understandably annoyed about how the media and politicians portrayed this. Here's a rundown of why the increase should not be controversial.
- The media loves sensationalism and will obviously promote it (especially taking the rate increase out of context)
- This rate only applies to those with individual plans (i.e. no group policies are affected)
- The bad economy forces healthier subscribers to drop or choose smaller plans
- This makes the overall pool sicker and older and therefore more costly
- In order to maintain coverage, money has to come from somewhere, in this case individual plans to help offset the losses
- The rate increase is attached to customers who had the option of choosing a different plan that didn't
- An independent actuary body approved these rates and the rates are in compliance with California laws
There's more info on this particular story, and I think it's important to read the official explanation of the rate increase.
One positive out of this story is that is spurred some more debate (even bad debate) that has shed light on how insurance companies run. The health care reform debate has unnecessarily made insurance companies THE evil components, where there really shouldn't be a scapegoat. Every side needs to be fixed in some ways. I used to think insurance companies were some of the worst instigators of the health care crisis, but not any longer, after understanding how these companies are trying to stay in business and provide a quality service to millions of people.
This is why it is so important to learn the topics from those who know what they are talking about. The experts are called experts for a reason.
Now I just need to convince my expert to write some blogs!
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