Blue Shield of California apparently thinks it’s a big deal to abide by the letter of the law…. while at the same time, violating its spirit.
After a week of headlines for a series of rate increases that totalled 59%, Blue Shield played a game with the media today. they put out a press release saying they would submit their most recent rate increase to an independent actuary, calling their move “unprecedented.” But that’s actually already required by a new state law, SB1163, that is effective January 1. (Blue Shield say it doesn’t apply because they filed the rate increase right before the new year; yet since the rate increase doesn’t take effect until March, it applies, despite Blue Shield’s assertions.) It’s literally the least they can do.
The real headline is that they are not abiding by Insurance Commissioner Jones’ request for a 60-day delay, which he requested for more time to review the rates. And they apparently aren’t working with the Commissioner on the review.
For Blue Shield, this is trying to win a battle but possibly losing a war. Commissioner Jones may not have the ability to outright reject rates increases, but because of the new federal health law, and follow-up state laws, he has new authority in a range of areas: he has more investigative power in obtaining additional rate information, he can enforce a new and more strict medical loss ratio; and new rules for coverage for children with pre-existing conditions, and more. And his declarations about an insurers’ rates can lead to barring an insurer from the new Exchange in 2014.
Most imporantly, Blue Shield’s lack of cooperation simply makes the case to state legislators to provide full authority to approve or deny rates. Assemblyman Mike Feuer has a new bill, AB52, to do just that. And Blue Shield is now a new example about the need for that legislation to be passed.