Back in January, I blogged about Blue Shield in California was proposing 59% rate increases - they had increased costs because sick people were using their insurance and healthy people were dropping their insurance.
Now they are backing down from their rate increase, saying that they are willing to take the hit in this bad economy.
"...the decision to not raise members' premiums this year will cost Blue Shield $35 million to $40 million in lost revenue.
"By agreeing not to raise rates this year, we are helping to make coverage more affordable for our members during tough economic times," said Blue Shield of California CEO Bruce Bodaken, in a statement. "It's a financial risk for us, but a risk that's worth taking."
Still, the company rakes in about $1 billion in revenue from its individual insurance market plans and a total of about $10 billion annual from all of its insurance products, according to Epstein.
Hmmm... if they take in $1 billion and might lose $40 million, that's a 4% loss. Or a 0.4% loss on $10 billion in revenue. My sympathy is slim. They are thinking of the bottom line, not the patients. And did I say this was their third rate increase since October of last year?
Their biggest complaint is healthy people have dropped their health insurance as the economy has sagged and jobs have been lost. So insuring sick people is hurting them. I do not extend them my sympathies here.
Its about the patients, not the bottom line.