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Monday, February 15, 2010

Future Insurance Spikes May Affect Policyholder Retention

The residents in at least three states who purchase their own health insurance coverage are being stiffed with premium spikes of 15% or more in the near future. Many of these consumers are beginning to consider more affordable health insurance quotes from various insurance agencies and brokers.

Anthem Blue Cross, a popular California health insurance provider and subsidiary under WellPoint, is embracing the challenges to retain these policyholders. The branch has been under fire from politicians and regulators after notifying many of its 800,000 California Anthem customers that it plans to increase insurance rates by up to 39% at the beginning of March.

The Anthem Blue Cross plan in Maine is requesting increases around 24% this year. The past year, Maine's Anthem branch raised rates 32%.

In Oregon, many are experiencing increases of 15% or more, with last year's hike being around 25%. Even some companies are beginning to have their current group health insurance policies evaluated by professional insurance agents to prepare for any hikes in business insurance rates. However, the current increases affect customers who own individual health insurance, rather than receiving coverage through their employer.

Insurance premiums for individual policies are much more vulnerable than group health insurance provided by employers. This is partially due to the fact that a several people are covered under one group insurance plan, among which the risk is more widely spread. Many people who have lost their jobs have decided to go without health insurance, or resort to a limited coverage, high-deductible policy.

Rate spikes in this insurance market have occurred sporadically for years. Experts expect the increases to become a ongoing trend.

"You're going to see rate increases of 20%, 25%, 30%" for personal health insurance plans in the near future, predicts Sandy Praeger, chairwoman of the National Association of Insurance Commissioners.

Later this month, several Maine consumer groups are planning to rally at two public hearings in response to Anthem's newly proposed rates.

Many consumers are a looking at other insurance providers for additional coverage options, comparing individual health insurance quotes from multiple insurance brokers.

Indianapolis based WellPoint justifies its need to increase premiums based on economic factors. The carrier claims a weak economy has resulted in a less people remaining in the individual health insurance market, while at the same time, the cost of care has risen due to higher provider prices and growing use of expensive diagnostic tests.

Experts are advising consumers to shop and compare multiple health insurance quotes to find the best premiums and coverage benefits.