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Blue Shield of California cancels scheduled health insurance rate hike Posted: March 17th, 2011

By Maryalene LaPonsie

In a move sure to be good news to policyholders, Blue Shield of California has announced cancellation of a planned health insurance rate hike. The company had scheduled a premium increase - the third since October 2010 - to go into effect for its individual health insurance plans on May 1.

"By agreeing not to raise rates this year, we are helping to make coverage more affordable for our members during tough economic times," said company chairman and CEO Bruce Bodaken in a press release announcing the decision. "It's a financial risk for us, but a risk that's worth taking."

Blue Shield of California has been subject to intense public scrutiny after policyholders received notice of the health insurance rate hike earlier this year. The increase was the third scheduled by the insurer after earlier premium increases went into effect in October 2010 and January 2011.

The third hike was originally scheduled for March 2011 but later delayed to May at the request of the California Insurance Commissioner. According to some media reports, the three hikes would have meant total premium increases of up to 59 percent for some individual health plan subscribers.