Recession Causes Higher Individual Health Insurance Rates In More States

Recession Causes Higher Individual Health Insurance Rates In More States

Recently, Anthem Blue Cross–the largest provider of health insurance in California–proposed a significant increase in the price of its individual health insurance policies. The price hike of over 30% was set to take effect several months from now, and drew criticism from the Obama administration. Under current law, health insurance companies are regulated by the states. Health and Human Services Secretary Kathleen Sebelius only had the authority to write a stern public letter criticizing Anthem. In an attempt to resuscitate healthcare reform, Democrats pointed to the WellPoint subsidiary’s actions as a harbinger of what would happen in the health insurance market if their bill fails and the status quo remains.

It remains to be seen whether that tactic will revive support for health insurance reform, but there are indications that individual health insurance plans in several other states are looking to follow suit. In Maine, Anthem Blue Cross health insurance wants to increase its rates by nearly one-fourth; that’s on top of last year’s jump of one-third. Meanwhile, health insurance companies in Oregon have had their requests for 15% rate increases for individual health insurance approved. They, too, had also previously increased prices the year prior.

Many people have demanded an explanation for these price increases, especially during a recessionary period. Standard economic logic would have predict that lower demand from