Proposed insurance rate hike stokes fears [The Santa Fe New Mexican]

April 15--Sonia Shad Goldstein shuddered at the thought of life without health insurance. But that is what the 60-year-old is contemplating, she said Saturday: putting herself at the mercy of life's vagaries and going uninsured.

The financial strain of a proposed 6.9 percent increase, scheduled to go into effect June 1, on monthly premiums for her Blue Cross Blue Shield policy would be too much, the Albuquerque woman told a small group of vocal critics of the proposal at the Public Employees Retirement Association building.

"My premiums would go up to $809," Goldstein said. "That is more than my mortgage. I imagine myself, a 60-year-old woman, without health insurance. It scares the bejesus out of me."

Goldstein's fear wasn't isolated. Several Blue Cross Blue Shield policyholders spoke of potential financial hardships if higher monthly premiums were to kick in as Blue Cross Blue Shield wants.

Intently listening to it all was Aaron Ezekiel, a hearing officer for the New Mexico Division of Insurance. He is tasked with recommending by April 20 whether to approve the proposed rate hike on 31,000 New Mexicans, all of whom have individual health care policies with the company -- as opposed to New Mexicans who are part of group plans or employer-based programs.

Blue Cross Blue Shield had its chance to lay out its case for the increase earlier this month, and argued that the 6.9 percent rate increase would help cover claims that led the company to lose $7.2 million in the individual market in 2011.

Saturday's hearing was reserved for consumers, however. And one after another they poured their hearts out to Ezekiel, some pleading with him to reject the increase or else they'd be forced to cancel their policies and join New Mexico's already large uninsured population.

With 430,000 of its nearly 2.1 million residents without health insurance, New Mexico has the second-highest uninsured rate in the nation, topped only by neighboring Texas.

Others vented their anger and indignation, lacing comments with phrases and words like "unmitigated greed" and "unconscionable" to characterize the company's rate hike request.

Still others spoke of the squeeze on America's "quickly sliding middle class," as one man wrote in an email to Ezekiel.

Michael Bird of Kewa Pueblo, meanwhile, noted the historical disparities in health and access to care between Native Americans and the rest of the U.S. population.

"Welcome to the Native experience," Bird said to the crowd, evoking a bit of laughter.

Then he spoke of Native Americans' exposure to Christianity by Europeans.

"It's really interesting for me to reflect on this," he said. "The U.S. is called a Christian nation. But the principles and values I was taught and the behavior I see in this nation, there are so many contradictions and hypocrisy. The reality is that it is not practiced. You see ... greed and avarice. It really is appalling and disturbing."

Assistant Attorney General Brian Harris, meanwhile, stood up to tell Ezekiel that his boss, Attorney General Gary King, will oppose the rate increase request.

With only a week to consider all the public testimony and the company's arguments, including actuarial tables, before recommending action, Ezekiel has a difficult task. He must consider Blue Cross Blue Shield's hard financial data and the plight of persons who might become uninsured if the increase goes through. Such is the plight of many New Mexicans in 2012.

Blue Cross Blue Shield filed for the rate hike last year, and Saturday's hearing represented the penultimate step in the process. Ezekiel will soon make his recommendation to State Insurance Superintendent John Franchini, who said he will decide the issue before June 1.

The timing of Blue Cross Blue Shield's rate hike request provoked some skepticism Saturday, mostly because it predated a new law that took effect Jan. 1.

"It seems to me that they are trying to ram through as many increases [as possible] before the law goes into effect," said Fran Hardy of Lamy, who went on to urge Ezekiel to recommend blocking the request. That would force Blue Cross Blue Shield to file again and thereby be subject to the new law, which gives New Mexico insurance officials power to more muscularly vet a company's finances, including examining executive pay and surpluses.

"I am not a lawyer," Hardy said. "I don't know the legalities involved in delaying their request until the new law takes effect."

Speakers also wondered why Blue Cross Blue Shield couldn't dip into its parent company's surplus to keep their monthly premiums lower. Blue Cross Blue Shield is a subsidiary of Illinois-based Health Care Services Corp., which recorded an $8.9 billion surplus in 2011, according to its financial filings.

The proposed 6.9 percent rise in monthly premiums is somewhat smaller than the 9.9 percent hike the company initially sought last year. But for more than 25,000 of the 31,000 affected policyholders, a rate increase would represent the second in three years. Blue Cross Blue Shield won a rate hike in 2010 that boosted costs for each policyholder by 18 percent to 25 percent.

Company officials have said that without the rate increase, Blue Cross Blue Shield might have to take drastic action, including pulling out of rural areas. The company is the only major health insurance carrier to sell policies to individuals in every part of the state, even rural areas, where the costs of offering health insurance are higher, officials have said.

Paul Bardacke, an attorney for Blue Cross Blue Shield and a former New Mexico attorney general, also attempted to rebut arguments that the company could simply dip into its parent company's surplus.

"That surplus is from 13 million members from Illinois and Texas," he told the crowd.

Health Care Services Corp., which operates subsidiaries in Texas, Oklahoma and Illinois in addition to New Mexico, insures 13 million Americans overall, with about 300,000 of its members in New Mexico.

"None of that surplus is from New Mexico. New Mexico draws down on that surplus," Bardacke said. "It doesn't belongs to BCBS. It belongs to members."

Contact Trip Jennings at 986-3050 or at [email protected].

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(c)2012 The Santa Fe New Mexican (Santa Fe, N.M.)

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