The End of Affordable Individual Health Insurance, as we Know It

The changes are harly trivial. Health insurance policyholders in a handful of states across the country have been receiving notifications from their insurance companies that they can expect to pay perhaps 15% more on their policies, for the same service. One health insurance company in Maine, Anthem Blue Cross is jacking up its rates nearly 23%, and is getting a lot of hate mail from local representatives and customers. That's not as bad as what they did in California - the sunny state saw nearly twice that kind of escalation. And in Oregon, people got hit with a 25% hike last year, and can expect something like that this year too. All this happens mainly to people who buy their own personal policies, instead of going through the companies they work for. Bulk purchasers, like employers, see some kind of reason prevail. If insurance companies are not reasonable, the employer will walk with his hundreds of potential customers. All of this could be an incidental effect of how the insurance companies lost thousands of customers over the past year - customers who could no longer afford cover, now that they don't have jobs. Affordable individual health insurance is quickly becoming a thing of the past.

Right away, people can expect to be paying a third more on individual policies, says the National Association of Insurance Commissioners. If this gets your back up and gets you planning the vitriol you'll pour down in your letter to your Congressman, you're out of luck. The government doesn't really have enough power, dictating prices. But there certainly is going to be plenty of table pounding at state legislatures. It's not that the health insurance companies don't see how difficult they are making it for families to get access to healthcare. For a family of three, that works out to something like $1300 a month. In several states, consumer protection groups our putting together major protest rallies; and they should. Once access to affordable individual health insurance is taken away, where does that leave us? And since the insurance companies understand the situation from our point of view, they do support President Obama's health care reform, now hopelessly stalled. They want some kind of system that can help everyone in the country be covered too. If lots of people drop out of the system like they are doing now, the companies have no choice but to spread their losses among other existing customers.

Still, the government in Maine, rejected some of the health insurance companies rate increases; after negotiations, they brought it down to 11% or so. And the health insurance companies are suing the state. The company argues that they aren't doing this for some kind of obscene profit. They claim that they can barely stay above water as it is. In Kansas too, insurance companies are raising their rates by a third. Mostly, the governments are falling in line behind these demands. They do agree that the cost of taking care of people is rising, and one can't expect these companies to not pass on those costs to the customer. Basically, anything between 10% and 25% is what we need to expect. Just one more effect of the recession.