Buyer beware! Americans are feeling the squeeze of rising health care costs including insurance. It’s no news that the number of uninsured continues to rise as health insurance becomes unaffordable. The below article depicts two California Health Plans that excessively overcharged premiums to those subscribers who were the sickest and likely the most in need of coverage.
Health Blog – Wall Street Journal Blogs
Two California health insurers have been overcharging patients for a special type of coverage for people with pre-existing health problems, the Los Angeles Times reports .
The federal law known as HIPAA, often cited in the health-care industry for its health-privacy provisions , also helps sick patients get health coverage. When somebody loses a job, for instance, they first get Cobra coverage. When that expires, if they’re too sick to get insurance on the open market, they can continue with so-called HIPAA-plans.
But, as you might imagine, with pools of sick patients, the plans are often enormously expensive. This explainer we wrote a while back showed HIPAA premiums for one individual were around $1,000 a month, compared with at most $400 a month for non-HIPAA plans.
California in 2001 passed a law that attempted to control the plans costs by capping them at the “average premium paid” in the state’s high-risk pool, another option for sick patients, but Blue Shield of California’s rates are as much as 55% higher, and Anthem Blue Cross’s have been as much as 36% higher, LAT reports.
Here are two examples the newspaper cites: Blue Shield’s monthly premium for a family of four in Los Angeles with a 40-year-old primary policyholder is $1,461. That’s $401 a month, or $4,812 a year, above the cap. Anthem’s 2009 monthly premium for the same family was $1,356 — $296 a month, or $3,552 a year, above the cap.
After hearing from the paper, Anthem reviewed and found overcharges for enrollees age 60 to 64 since 2006. The company, which is owned by WellPoint, said it would reimburse policyholders for overpayments, with interest. Blue Shield denied that its rates were incorrect and added that it lost about $7 million in its HIPAA coverage last year.
The Times said Aetna and Health Net priced their plans according to state law.
