Off-key Anthem – the insurance company, not the song
Sunday, March 14, 2010
In case you missed it, Consumer Watchdog joined the chorus of voices booing Anthem Blue Cross and its rate increases, accusing the insurance carrier – a subsidiary of Wellpoint – of using “enormous rate hikes to force patients into lower-benefit and higher-deductible health coverage in violation of state law.”
What constitutes “enormous”? We’re guessing 30-40 percent would qualify.
There’s more at stake than policy-holders’ dollars (Paul Krugman laid it all out here). The stability of the health care-insurance system itself is at stake, as higher rates lead healthy customers to gamble that they will stay healthy, and drop their coverage to save the hundreds to thousands of dollars in monthly insurance payments. But the ill can’t afford to do that, since the rates, no matter how high, are cheaper than the medical care for which they obtained the insurance in the first place.
But as the healthy leave the plans and the sick stay, the insurers wind up with a customer base of people drawing more from the system then they put in. Which, of course, leads to rate hikes. Or collapse.