Blue Cross Busted

Blue Cross Blue Shield should be making tons of money. Every year I have been with them they have raised their rates far more than inflation. When I ask and complain about it, they say, “Oh, the cost of medical care has gone up.” Maybe they are looking at different statistics than I am, but what I read says that the rate of increase for medical care has slowed considerably although still faster than inflation.

In 2015, the costs for HMOs increased by 7 per cent and for other medical insurance it increased by 9 per cent. The inflation rate in the general economy was 0.1% for 2015. So why are medical costs going up so much faster? A key reason is the aging population. It is well know that for most people most of the medical expenses occur later in life and we have the massive Baby Boom generation which is now getting to be later in life which is skewing the numbers.

Then there are advances in medical techniques, medical diagnostics, medical machinery, medical treatments and new drugs. These new methods and technologies seem to rarely be less expensive. So as you substitute these newer more expensive techniques and machines and drugs it tends to add up.

OK, so why if the medical costs increased by 9%, why is Blue Cross Blue Shield of Maryland raising their prices by more than that? They claim that they had over $100 million in losses because they guessed wrong as to the patient mix that they covered. They expected more young healthy people to sign up because of Obamacare. They claim they got more older and sicker people than they expected.

An article in the Baltimore Sun said that Blue Cross Blue Shield of Maryland was raising rates by up to 26%. Bullshit. They raised my wife’s and my policy by 34%. That is almost 4 times the rate of inflation for medical costs. So maybe that is an aberration you might say? Bullshit again. They have raised my rates by 18%, 14%, 7% (OK, that one wasn’t too bad), 8%, 31%, 26%. 11%, 16%, 18%,, 10%, 48%, 5%, and finally the 34%. Does that look anything like what we have experienced in terms of inflation? Are they incompetent or are they just gouging everyone.

If you want to make a difference, call your congressman or woman and ask that there be true competition in health care insurance. Tell them to repeal the McCarran – Ferguson Act. It bans interstate competition in healthcare insurance. It basically creates state monopolies in health insurance and is a key reason that rates are so high. There needs to be competition. The insurance lobby is too strong. You would think that Democrats would want to repeal the law because it would help out the people. You would think the Republicans would want to repeal the law because they say they believe in market forces and competition. They don’t, probably because the insurance industry is a large donor to political campaigns.