Update on Anthem Blue Cross of California 2/1/2013 Rate Increase

We have an update regarding the Feb 1st 2013 rate increase filed by Anthem Blue Cross of California. The carrier has negotiated with the California Department of Insurance and filed a reduced increase. There are some new angles to this revision which are interesting as a long-time watcher of the market. Let\’s take a look at the original and revised increase.

The old and new individual and family Blue Cross rates

The original increased garnered quite a bit of press with an average of 17.9% increase across most of Anthem Blue Cross\’ California\’s individual and family market (which is sizable – second only to Kaiser). Some individuals would receive increases up to 25%. The new revised increase negotiated between the carrier and the DOI is for an average of 13.9% although the high end will probably still stand for certain individuals. Although better than the original 18%, it\’s still a pretty big hit. As we detailed in many calhealth.net articles, the rate increases are not unexpected due to new mandates and the ever-increasing cost of health care in California but the back and forth between carrier and California Department of Insurance is new, especially since the revision is occurring after the rate change over date of 2/1. This is where things are different.

Retroactive changes, reinstatements, and the like

Many people have already made changes due to the increase since most member received notification 2-3 month\’s prior to the change over. Now, the information upon which they made their changes (cancel coverage, downgrade coverage, etc) has change. Anthem is allowing a special dispensation where individual policy owners that downgraded coverage can move back to their original plan without medical underwriting. Also, members that cancelled coverage altogether can reinstate their coverage without going through medical underwriting. This is a unique situation and one we haven\’t seen before. Please contact us if you wish to find out what the new rates will be. We just need your age(s), zip code, and plan name to provide an updated quote for you and quote engine will reflect the new rates shortly for new health insurance shoppers.

Grandfathered plans should really consider offer

We just received the new updated plan designs for the Health Exchange and outside of the bronze plan or qualifying for subsidies based on income (up to 400% of poverty level), the costs are going to be really high. If recently cancelled an Anthem individual policy which was originally effective prior to 10/23/2010, please consider keeping the plan until we can see what the new rates will be Jan 1st, 2014. Non-grandfathered plans will have to roll over to a new plan and the rates will likely be much higher than current options on the market. We\’re happy to walk through this consideration as it\’s confusing (at best).

Anthem health rates going forward

We foresee the new Health Exchange plans being 30-50% higher than equivalent coverage but that\’s a misnomer since it wont\’ be equivalent coverage…it will b emuch richer and therefore quite a bit more expensive. We assume they\’ll have to adjust and bring out more options once the rates are available. If you\’re looking for an alternative to Anthem and do not have a grandfathered health plan, we recommend looking at the Health Net Advantage plans till you have to roll over to the new plans in 2014.