BUSINESS
Washington state denies Blues plan's rate hike request
Regence Blue Shield wanted to tack on increases to individual plans because of changes necessitated by the health system reform law.
By Emily Berry, amednews staff. Posted Dec. 30, 2010.
Washington State Insurance Commissioner Mike Kreidler has rejected a request by one of the state's largest insurers for higher premiums after several calls for more information about the plan's application.
The rates would have affected customers with individual coverage beginning Jan. 1, 2011.
In October, Regence Blue Shield raised rates for two lines of individual policies by 16.5% and 23.7%.
The insurance company is replacing those policies with new ones called Evolve that cover children and offer other safeguards required by the Patient Protection and Affordable Care Act. Existing customers are required to sign up for new Evolve policies. Regence wanted to make those policies more expensive than the existing ones, but Kreidler rejected the request. The proposed increase for one line was 3.7%, and 4.9% for another line.
"Regence failed to make its case," the commissioner said in a Dec. 7 statement. "I'm disappointed and frustrated that I've had to take this step, but Regence's policyholders are my top priority. They're counting on me to review the rates and make sure they're justified."
Regence has not decided whether to appeal Kreidler's decision. "Regence met with the [Office of the Insurance Commissioner] to discuss additional information that the commissioner had requested, and we expect to continue working with them to address their concerns," spokeswoman Rachelle Cunningham said in an e-mailed statement.
In November, Kreidler asked legislators to change state law so that he may retain the right to reject rate increase requests permanently. Otherwise, that authority ends on Dec. 31, 2011. He also wants to be able to consider the surplus levels of insurers when he decides whether to grant those requests.
Regence had an estimated $1.7 billion in reserve in the first quarter of 2010.
Kreidler also asked state lawmakers to make rate increase applications public, which they currently are not unless the insurer agrees to their release.
The Washington Legislature is expected to look at bills on those matters when it convenes in January 2011.
The insurance commissioner in Oregon, where Regence is based, may consider reserves in deciding whether to approve rate increases and to make rate increase applications public.
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