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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Largest Health Firms In Red For 1996 Laws Increasing Access To Health Insurance Get Blame

Associated Press

Idaho’s two largest health insurance companies posted net losses in 1996, the first time in at least eight years.

Both blamed much of the problem on relatively new state laws intended to help more Idaho residents buy health insurance, even if they have debilitating, expensive illnesses.

For 1996, Blue Cross of Idaho posted a net loss of $350,744, its first loss since 1988. Medical Service Bureau-Blue Shield reported a loss of $2 million, the first in at least 10 years.

“That increased access to those people is good for the community, but there is a very real price tag attached,” said Tracy Andrus, spokeswoman for Blue Cross of Idaho, the state’s largest insurer.

People who bought those policies are undergoing more medical procedures than insurers expected. Their premiums did not cover the cost of their care.

“We anticipated that costs would rise as a result of the reforms,” Andrus said. “We did not anticipate they would rise so fast.”

As a result, customers covered under the Individual Health Insurance Availability Act or the Small Group Health Insurance Availability Act may see their premiums rise this year from 6 percent to 40 percent, she said.

For example, a 30-year-old woman with an individual policy called Major Medical 1000 paid $66.20 a month in February 1996.

Assuming she did not come down with a chronic, expensive illness, she was paying 16 percent more, or $77 a month, a year later.

About 96,000 Idaho residents have individual or small-group coverage. Most are self-employed or work for small companies.

Other Blue Cross policy-holders might see premium increases, but not as high as the individual and small-group customers.

At MSB-Blue Shield, Idaho’s second-largest insurer, officials said premium hikes for people with individual and small-group policies would average 8 percent to 18 percent this year, about the same as in 1996.

Neither company is in any danger of failure. Each has hefty reserves: $48.6 million for MSB-Blue Shield and $83.4 million for Blue Cross. It is a cushion against hard times, a way of making sure customers do not get left in the lurch by a bankrupt company.