Members of Generation X believe they will need to save at least $1 million before they can retire. Who can help them save it?
June 30--The cost of health insurance continues to rise even while insurance companies -- including so-called nonprofit companies -- have socked away $1 billion surpluses.
That's the case in Washington state where nonprofits Regence BlueShield and Premera Blue Cross each report reserves of more than $1 billion.
This is shameful at a time when businesses and individuals have been routinely paying increases of 10 percent or more in recent years.
Yet, executives of these companies have no shame. At least one company will seek a double-digit increase on premiums for individual payers who buy coverage for themselves and their families.
"We understand that it's becoming harder for individuals to afford the increasing cost of health care," Jonathan Hensley, president of Regence BlueShield in Washington, said in a written statement about the requested increase of 14.7 percent. "But as dozens of carriers have abandoned this fragile market over the years, Regence is doing our best to continue offering a comprehensive set of affordable benefits to serve Washingtonians, even as we predict a loss of $4.5 million on this business this year."
State Insurance Commissioner Mike Kreidler, whose office must approve any increase, was less-than sympathetic with Regence's financial position.
Even if Regence loses what it projects, Kreidler said, "that's less than half of 1 percent of the company's $1 billion surplus. ... In fact, Regence could continue to lose $4.5 million annually for the next 220 years and it would still have a surplus."
When Regence BlueCross BlueShield of Oregon recently sought a 6.4 percent increase there, it withdrew the request after state officials objected.
Unfortunately, Washington state doesn't give the Insurance Commissioner's Office the authority to consider a company's surpluses when reviewing a request for a rate increase.
Kreidler has been pushing to change state law so it would be in line with Oregon and 10 others that allow broader financial considerations for rate-hike reviews for individual and small group plans.
Washington should give the insurance commissioner the power to consider surpluses in rate-hike decisions.
Having a reasonable surplus is a good business practice, but not when it is the result of unnecessarily high premiums year after year. Some of the $1 billion cushion should be returned to the customers by using it to keep premium rates as close to flat as possible. This, after all, is supposed to be a nonprofit insurance company.
Our address is P.O. Box 1358, Walla Walla, WA 99362.
If possible, e-mail letters to email@example.com. Include the letter in the body of the email. Do not send an attachment.
Letters must be less than 400 words.
(c)2012 Walla Walla Union-Bulletin (Walla Walla, Wash.)
Visit Walla Walla Union-Bulletin (Walla Walla, Wash.) at union-bulletin.com
Distributed by MCT Information Services