Yeah, you know the phrase: You’ve "jumped the shark" by doing something
too monumentally stupid to be believed: Like when the Fonz, with
leather jacket still affixed, water-skied over the man-eating shark in "Happy Days". Blue Cross’s shark-jumper was its 39% health insurance premium hikes,
as other prices flatlined or dropped. Boy, did that focus the attention
of a Congress and White House flailing around a sinking health care
reform bill.
The rate hikes came to light in California, mostly because the LA Times had the wit to write about
the screams of outrage from families already pressed to a fiscal wall.
The state’s politically alert insurance commissioner (He’s also running
for governor) also had the wit to call for an investigation, after the
White House demanded that Anthem Blue Cross justify the crushing
increases–for instance, a couple with a combined $10,000 annual deductible whose monthly premium hit $1,000. Or a family whose new $1,600 monthly payment was more than their mortgage.
The White House now has its poster boy for reviving a comprehensive
health reform bill. Department of Health and Human Services chief
Kathleen Sebelius wrote a semi-polite letter to
Blue Cross of California, requesting justification for the size and
timing of the increase even as its profits rose. President Obama got as close to angry as he ever does when talking about it with Katie Couric on Sunday.
It didn’t help that Blue Cross, in its letters to people with individual policies, tried to blame the whole increase on
rising medical costs. At the same time, it was promising Wall Street
that it would maintain its multibillion-dollar profits even though it’s
losing customers (nearly 4% of them last year alone).
If more people keep having to drop their insurance because they
can’t afford it, and insurers’ answer is to keep raising rates to keep
Wall Street happy, at what point does the last person drop her
individual policy? Maybe, because of this gift from Blue Cross,
lawmakers will act before we get the answer to that question.
