Health Insurance Firms Press For Big Rate Increases Blue Cross Seeking 19% Hike; Msc Will Raise Its Premiums 22%

Several health insurance companies are requesting double-digit rate increases on individual policies just months after the state Legislature dismantled most of its earlier efforts at health care reform.

Blue Cross of Washington & Alaska has asked for a 19 percent rate increase on individual policyholders. That’s because of $10.2 million lost during the first half of this year alone, vice president Trae Andersen said Monday.

Pierce County Medical Bureau Inc. wants a 34 percent premium increase for individuals, estimating it will lose $9 million this year, spokeswoman Julie Pisto said.

And State Insurance Commissioner Deborah Senn has already approved a 22 percent rate increase for Spokane-based Medical Services Corp. in Eastern Washington and a 14.2 percent hike for King County Medical - all on individual policyholders.

Medical Service Corp. expects to lose between $5.5 million and $6 million this year, said spokeswoman Cher Desautel.

Supporters of the Legislature’s 1993 Health Care Reform Act say they predicted large rate increases if the reforms were repealed.

“The insurance industry was working to defeat the reforms, saying let the free market work,” said Sen. Rosa Franklin, D-Tacoma, whose district encompasses many of the 20,000 people affected by Pierce County Medical’s rate increase proposal.

“Now they turn around and give people the whammy.”

But Rep. Philip Dyer, R-Issaquah, who chaired the House Health Care Committee, said the rate increases are the result of providing insurance to more people.

Some opponents of the Legislature’s health care reform efforts blame the rate increase requests on parts of the 1993 act that have not been repealed, such as a requirement that companies insure people with pre-existing conditions.

Individual policy rates may be skyrocketing because of something termed the “doom loop” and the “death spiral.”

The death spiral occurs when sick people join the insurance pool, forcing prices to increase. Healthy people decide they’re paying too much and leave, leaving insurers with a greater proportion of sick subscribers, said state Health Care Policy Board spokeswoman Leslie Thorpe.

“Eventually, you’ve got insurance just bought by sick people and it costs too much for anyone to afford,” Thorpe said.