Blue Cross Begins Rate Hikes for 600,000 Individuals

Notices of Blue Cross health insurance rate increases, averaging about 25%, have been sent out this month to 41,750 individual policyholders statewide as part of a plan to raise rates this year for all of its 600,000 insureds with individual coverage, Blue Cross officials said Monday.

Depending on what age the policyholder was when he or she enrolled with Blue Cross, the increases in the Los Angeles area bring the cost of coverage for single people carrying a $500 deductible under the applicable fee plan to an annual range of from $1,560 to $4,440 a year, according to a chart released by the company.

According to the same chart, families covered with similar individual deductibles and fee plans would pay from $4,356 a year to $10,188, depending on how old the family head was when enrolled.

Blue Cross officials stressed that these price ranges would not apply to those with different deductibles, different fee plans, or holding coverage where their prices were not pegged to the age at time of enrollment. The prices would also be different for different areas of the state.

About 2.3 million people who have Blue Cross coverage through group policies are not affected by the rate increases for individual coverage. Last November, Blue Cross said it would raise group coverage premiums by an average of 15% to 20% in 1988.

The officials were asked for information about the latest increases for individual coverage after several irate policyholders called The Times to complain about them. The officials provided the chart as an illustration but not a generalization of the size of the increases.

Mark Weinberg, senior vice president of individual services, said the increases, being sent out monthly before new payment periods for various policyholders, range from 10% to 40% on an annual basis.

“Those rate increases are . . . not intended to do anything but reflect the actual cost of the product,” Weinberg said. “If you look at the health insurance industry, they reflect pretty straight the changes in utilization and cost of medical services.”

Two Blue Cross policyholders who spoke in detail to The Times about their coverage costs said their premiums have mounted dramatically in the last four years, even while their deductibles have increased. In short, they are paying more for less coverage.

Genevieve Merl, a Downey housewife, said, for example, that in 1984, shortly after enrolling in Blue Cross’ “prudent buyer” plan, she paid $1,796 a year for coverage for herself only carrying a $250 deductible. This was raised to $2,434 in 1986, then to $3,168 in 1987 (when her deductible was doubled to $500), and now will go to $3,996.

Ron Barco, a Studio City salesman, said that in April, 1984, he was billed at an annual rate of $3,375 for family coverage for himself, his wife and his son, at a $250-per-person deductible. The deductible was doubled to $500 in November of that year without a change in rate.

He said the per-person deductible for the Barco family was doubled to $1,000 in November, 1987, and the rate increased slightly at the same time to $3,444 a year. Now, despite what Barco said was an oral pledge to hold that rate for a year, he has received an annual rate increase, with the $1,000 per-person deductible, to $4,308.

Increases With Age

Weinberg and Blue Cross spokeswoman Jeanette Hartman said that those policyholders who do not have a coverage plan pegged to their dates of enrollment might get larger increases as their increasing age bumped them into higher payment groups.

“We attempt to set rate increases that reflect the cost of medical care for that class of business,” Weinberg said.”

The newly quoted rates are only good for the period of a person’s payment, he emphasized. If, as in the case of Merl and Barco, they pay four times a year, they can be increased again after three months. If they pay the entire annual premium at once, they are insured against another rate increase for a full year.