Health-plan costs soar for individuals

By Kyung M. Song
The Seattle Times
July 9, 2009

In what is becoming an annual ordeal for policyholders, Regence BlueShield is raising premiums for 135,000 individual health-plan members in Washington by an average 17 percent on Aug. 1.

It is the third consecutive year that the state’s largest provider of individual coverage has boosted rates by double digits. And it comes after two other insurers, Group Health Cooperative and LifeWise Health Plan of Washington, recently imposed similarly steep premium increases.

North Seattle resident Gail Petersen said having more choices won’t make health plans any more affordable. Petersen, 55, and her husband pay more than $1,400 a month to Regence to cover their family of five and will pay $300 more starting in August.

In 2008, Group Health rolled out eight products to join its lineup of a dozen individual health plans. They included high-deductible health savings accounts, which allow people to put aside up to $5,950 annually in pretax dollars — if they have that much upfront — to pay for medical expenses.

By catering to different population segments, Group Health in the past 15 months has nearly doubled its individual-plan members to 36,000. But those new customers are facing a 13 percent rise in premiums because Group Health underestimated anticipated medical claims, said Mike Foley, a spokesman for the co-op.

http://seattletimes.nwsource.com/html/health/2009436261_regence09m0.html

Once Congress passes a mandate for individuals to purchase health plans, presumably non-profit Regence BlueShield, as the largest provider of individual plans in the state of Washington, would be a provider of those plans. Also, Group Health Cooperative is the co-op that has been proposed to serve as a model for the public option.

Group Health has been shifting more costs to patients through consumer-directed high deductible plans and HSAs, and still has a double digit hike in premiums. Some model.

Can anyone seriously state, with a straight face, that mandating purchase of these plans will somehow magically end the double digit increases in premiums for these plans?

The answer to this question is actually quite complex, but the fundamental truth is that the cost containment measures under consideration in Congress will have very little impact in slowing the escalation of health care costs.

All other nations have health care financing systems that are much more effective in containing costs and without leaving people out, as we do. One simple click on this link will demonstrate in a single image how the United States is an outlier (and will remain so without bona fide financing reform):

http://economix.blogs.nytimes.com/2009/07/08/us-health-spending-breaks-from-the-pack/

In this graph, note that Canada and the United States followed the same curve until Canada established its single payer system. Then look at what happened.