IBC's Personal Choice Non-group plans dropped

January 12, 2010 8:39:28 PM PST
Lisa Garrett, 51, of Chadd's Ford, Pennsylvania received a letter a few weeks ago from Independence Blue Cross stating the health insurance plan she's had for 18 years is being discontinued. She got the plan because she was self-employed. Plus, she has type one diabetes and wasn't able to get coverage elsewhere. But she says the choices she's offered in place of her old plan are "unacceptable, they are really unacceptable."

Garrett says she has two options. For similar coverage to her old plan, her premiums will more than double. Her other choice is a health savings account in which she will have a $5,000 deductible. She's crunched the numbers and said her best option will leave her paying $4,200 dollars extra out of pocket this year.

"What bothers me is there are people that really can't do that," she said, adding, "I mean it is going to be difficult for me but I'll manage.

We sat down with Liz Williams, spokesperson for Independence Blue Cross. She admits some members will see increases up to 50-percent on their premiums but she says others can save up to 50-percent. Williams also said Philadelphia is much more expensive than other markets and they were forced to raise rates.

"The guaranteed-issue plans have been losing money for years, not a little but ten's of million's of dollars a year," Williams said.

She said Blue Cross aims to make a one- to two-percent profit which is much lower than other insurers. But because other insurers can deny coverage for people with pre-existing conditions, they can limit their risks and save money.

State Insurance Commissioner Joel Ario said the problem people like Lisa are facing highlights the need for better regulation.

"We would stop Blue Cross from doing what it did here, if we had the authority. But it's not really fair if we can't stop the commercial carriers from doing the same thing," Airo said.

And he said we could see more insurers raise rates or deny coverage as Congress scrambles to pass healthcare reform "so that whenever reform kicks in, you will be at the same starting point as everyone else."

Many, including Blue Cross, say in order to reduce rates across the board every insurer has to offer coverage to everyone and everyone has to have insurance. Otherwise as medical costs rise, people like Lisa will continue to pay hefty prices.

"It's really unfair, it's really unfair," she said.

Members of this plan have until Friday to make a decision. This could change once healthcare reform passes, but we may not see those changes take effect for several years.