Blue Shield agrees to independent review of health insurance premium rates Posted: January 17th, 2011

Saying it wants to establish trust in rate setting, Blue Shield of California announced plans to have an independent actuary review health insurance rates.

The move comes on the heels of public outcry over three Blue Shield rate hikes that will reportedly increase premiums for some policyholders up to 59 percent, as well as a letter from California Insurance Commissioner Dave Jones asking Blue Shield of California and other insurers to wait 60 days after the effective date of its most recent rate increase before requesting a new one.

While not addressing the commissioner's request directly, the insurer said it will "voluntarily subject its rates to an independent actuarial review and make refunds to policyholders if the actuary finds that the rates are unsound,'' according to a company news release.

In a statement, Blue Shield Chairman and CEO Bruce Bodaken said, "we regret that our members have received significant rate increases in recent months and want to be absolutely certain that the rates reflect our actual cost of providing medical care. If this independent review finds that the rates are not sound, we will hold our members harmless by refunding the difference with interest."

Despite rate increases, Blue Shield says that it expects to lose money in 2010 and 2011. It reports that its costs for medical care - including hospitals, physicians and prescription drugs - have increased an average of 15 percent annually for the last three years.