OLYMPIA, Wash. (AP) — Just over a week after the state insurance commissioner said that Regence BlueShield was sitting on record surpluses, the insurance company wants to increase average premiums by nearly 15 percent on its customers who buy coverage for themselves and their families.
Regence BlueShield said Wednesday it has asked the Office of the Insurance Commissioner to approve the rate increase that would on average be around 14.7 percent, though it would vary for customers depending on their plans and other factors. Company officials said they are predicting losses of more than $4 million this year.
“We understand that it’s becoming harder for individuals to afford the increasing cost of health care,” Jonathan Hensley, president of Regence BlueShield in Washington, said in a written statement. “But as dozens of carriers have abandoned this fragile market over the years, Regence is doing our best to continue offering a comprehensive set of affordable benefits to serve Washingtonians, even as we predict a loss of $4.5 million on this business this year.”
If approved by Insurance Commissioner Mike Kreidler, the increase would be effective from Oct. 1 to Dec. 31, 2013.
Last week, Kreidler announced that Regence BlueShield and Premera Blue Cross each had surpluses of more than $1 billion, more than what the companies are required to set aside in reserves.
Kreidler argued that the companies were building up a financial cushion that “comes at an expense for people” and noted that the cost of individual health policies in Washington more than doubled between 2005 and 2011.
In a statement last week, Regence BlueShield said its capital reserves provide a safety net for members against unknown risks and costs as well as money needed to finance initiatives. Using such money to buy down rates promotes a false impression of reducing health care costs; the cost of health insurance goes up because medical costs go up, the company said.
Kreidler has been pushing to change state law so the insurance commissioner can take into account the size of insurers’ surpluses when considering whether to approve or deny premium rate hikes for individual and small group plans. Eleven states, including Oregon, give their insurance commissioners that authority, he said.
Kreidler has 60 days to consider Regence BlueShield’s request.