This morning is the tale of two headlines. From the New York Times, Health Spending Rose in ’09, but at Low Rate, we learn that “total national health spending grew by 4 percent in 2009, the slowest rate of increase in 50 years.”
From the Los Angeles Times, Blue Shield of California seeks rate hikes of as much as 59% for individuals, We find out that Blue Shield of California seeks massive rate hikes on individual policy holders because BSC claims the cost of health care has risen rapidly.
Another big California health insurer has stunned individual policyholders with huge rate increases — this time it’s Blue Shield of California seeking cumulative hikes of as much as 59% for tens of thousands of customers March 1.
Blue Shield’s action comes less than a year after Anthem Blue Cross tried and failed to raise rates as much as 39% for about 700,000 California customers.
San Francisco-based Blue Shield said the increases were the result of fast-rising healthcare costs and other expenses resulting from new healthcare laws.
These two articles just don’t add up; they’re completely at odds with each other.
Of course some have argued a key benefit of private health insurance companies is their use of the concentrated purchasing power of their aggregated customer base, applied in negotiations with health care providers to yield lower rates and costs to consumers. If Blue Shield of California is “forced” to raise premiums because of growing health care costs, it means that BSC is doing a lousy job of wielding its purchasing power.