California health insurers squeeze small business owners with double-digit rate increases

[Amerigo Vespucci]

California health insurers squeeze small business owners with double-digit rate increases

http://crooksandliars.com/karoli/california-health-insurers-squeeze-small-bu

By karoli Friday May 28, 2010 7:00am

Might be time for Steve Poizner to come in from the campaign trail and have a look at the newest rate increases. According to the LA Times, the Gang of Five here in California is ganging up on small business owners with less than 50 employees.

Five major insurers in California's small-business market are raising rates 12% to 23% for firms with fewer than 50 employees, according to a survey by The Times.

Similar increases are being felt by many small businesses across the nation, including those in Texas, Ohio and Florida — mainly the result of escalating costs for medical care and pharmaceuticals, insurers say.

Insurers claim they either underpriced their policies or had unusually high claims.

Blue Shield, for example, said hospital charges rose nearly 20% last year, while physician costs and pharmaceutical fees increased almost as much. Anthem Blue Cross also cited the cost of medical care in explaining its average rate hikes of 13% this year.

"We understand that one group that has been most hard hit by the economic downturn of the past few years is the state's more than 3 million small businesses, who we all rely on to be major contributors to our local economy," Anthem spokeswoman Peggy Hinz said.

"We want to be competitive in the marketplace, but we also want to take care of our members," Hinz added. "We work each day to do both."

Forgive me if I'm skeptical of this. It seems suspect to me that the group slammed with high increases is the same group who is eligible for a Federal tax credit of up to 35%. Further, why wasn't that tax credit mentioned in any of the reports about the rate increases? The employers they use as examples are likely to be the same ones eligible for the 35% break.

Why not mention that in this context, LA Times?

I have heard anecdotal reports that health insurance agents here in California representing one of these companies are visiting small business clients and telling them the apocalypse is upon them. Statements range from claims of outlandish premium increases to the outright falsehood that employers will only have one plan to choose from after reform. They begin by informing employers who they finally managed to shift into high deductible plans with Health Savings Accounts that HSAs are dead. (They're not dead, just reduced to reflect improved insurance options).

[Skink]

1. Didn't we just pass laws to prevent this?

[SocialistLez]

3. You're joking, right? NT

[Abq_Sarah]

2. With the job losses across the nation

The small business insurance pool is hurting. An increase in medical costs + an increasingly smaller insured pool will naturally result in higher cost. I don't know if a full 25% increase is justified since I haven't seen their books but I wouldn't be surprised to see some increase. I doubt it has anything to do with the tax credit since most small businesses don't meet the qualifications for the full 35%.

[area51]

4. "Who could've predicted this?"

With the weak-assed health insurance "reform" bill shoved down our throats by bribed congressvermin, of course these companies are going to continue to fsck all of us over.

Each day, 273 people die due to lack of health care in the U.S.

We need single-payer health care, not a welfare bailout for the serial-killer insurance agencies.

The insurance companies can continue to exist -- heavily regulated and selling ancillary insurance for things like facelifts and tummy-tucks. Or they can choose to sell only house, fire, car, flood insurance in order to stay in business. Single-payer wouldn't put them out of business, though they deserve to be.