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Some health insurers want to raise rates by up to 56 percent, government report says

WASHINGTON — Consumers are facing budget-busting increases in medical insurance premiums, Health and Human Services Secretary Kathleen Sebelius said Thursday.

Sebelius released a report that said people buying their own insurance in at least six states have been facing pressure from insurers that want to raise rates by as much 56 percent. The report "shines a light on the urgency for health reform," Sebelius told reporters.

Proposed premium increases of as much as 39 percent by WellPoint's Anthem Blue Cross in California set off a wave of criticism and forced the company last week to announce a postponement. President Barack Obama seized on Anthem as Exhibit A to make his case for sweeping change.

A bipartisan White House health summit is scheduled for Feb. 25.

In a briefing for reporters, WellPoint executives blamed their proposed rate increases on rising medical costs and a pool of customers that is gradually becoming older and sicker, as younger, healthier people drop coverage. They insisted that their competitors are raising rates in much the same way.

"We understand this is a hardship," said Brian Sassi, president and CEO of WellPoint's consumer business unit. "This is not something that voluntarily we choose to do."

The premium increases affect the most vulnerable part of the health insurance market, policies marketed individually to customers buying their own plans. According to the Census Bureau, only about 9 percent of Americans purchase coverage directly, while nearly 60 percent are covered under employer plans. Family premiums for those with workplace coverage rose 5 percent last year, even as inflation fell 1 percent, but the increases were nowhere near the amounts seen in the individual market.

Medicaid cuts: Unless Congress bails them out, states probably will have to cut health coverage for low-income families and others without insurance, Families USA, a nonpartisan health advocacy group, said in a report issued Thursday. Florida might tighten eligibility in a way that would eliminate 19- and 20-year-olds from Medicaid, as well as some expectant mothers, McClatchy Newspapers said, citing the report.

Higher premiums

Several health insurance companies have proposed or sought premium increases. Among them:

• WellPoint's Anthem Blue Cross, 39 percent, in California. State officials say more than 700,000 households face increases averaging 25 percent overall and as high as 39 percent for some.

• Anthem seeks a 23 percent increase in Maine.

• Blue Cross Blue Shield in Michigan sought increases of 56 percent in 2009.

• Other states facing steep increases: Connecticut, Oregon, Rhode Island and Washington.

Some health insurers want to raise rates by up to 56 percent, government report says 02/18/10 [Last modified: Thursday, February 18, 2010 10:18pm]
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