Friday, June 22, 2012

Blue Shield Accused of Culling the Herd

Last week in San Francisco a consumer advocacy group called Consumer Watchdog filed a lawsuit against Blue Shield of California. They accuse Blue Shield of a pattern in which it stops selling a policy and then raises rates for those who are left in the plan. Those who stay tend to have more health problems because they don't have many other options for coverage.

The lawsuit argues Blue Shield is violating a 1993 state law that requires health insurers that intend to stop selling a type of policy to "pool" the health history of the members in the closed block of business with other enrollees to minimize rate increases for those left in the old policy.

The 1993 law also requires insurers to offer members the option to switch to a comparable policy that is accepting new members. But the consumer group's attorney, Jerry Flanagan, said offering members another policy with a deductible more than twice as high as the old policy and fewer benefits isn't "comparable."

"You can't close out older policies for the purposes of kicking out sick people," Flanagan said. "You buy insurance when you're healthy, you pay into it, and eventually people are going to get sick and are going to use their health insurance. That's how it works." He claims Blue Shield is trying to force policyholders out of older, more comprehensive individual plans into newer options that offer less coverage with higher out-of-pocket costs.

Blue Shield officials denied wrongdoing.

When this happens to your pool, call Allied Brokers. There are things you can do to avoid paying the increased rates. Blue Shield establishes lower rates within the same pool for those who are in better health. This is called “tier rating” and it is normally in five different levels.

If you are in good health, you can apply for one of the new plans that have lower rates. Or you can apply for a change to a lower tier premium rate for your present plan.

Another option is to change your deductible and/or drop some of the coverage. One Allied Brokers client saved $4,800 per year by dropping some coverage and raising his deductible from $750 to $2,000.

If you are in poor health, you can apply for a change to a lower tier rate level premium as your health improves. If you do not re-apply to prove you are healthy enough to change tiers, you are stuck. Most people do not know they can transfer to get a better deal. Call us- this service is free.

Visit our website at http://www.alliedbrokers.com/ for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.

The original article, by Victoria Colliver, can be found on SFGate.com

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