Protest over Blue Cross premium increase

When Deborah Jackson-Smith lost her telemarketing job in October, she also lost her health insurance.

That is why Jackson-Smith, of Philadelphia, who now volunteers as an advocate for the unemployed, showed up yesterday at a small protest outside the Philadelphia headquarters of Independence Blue Cross, the region's dominant health insurer.

Organizers wanted to protest against Independence Blue Cross' request to increase health insurance premiums 20 percent to 58 percent for some plans available to individuals and families who do not get health insurance at work, but who buy it on their own.

For example, in one plan, the monthly premium cost for a family with two parents in their 30s would rise from $1,069.15 a month to $1,634, a 52.8 percent increase, according to the company's filings with the Pennsylvania Department of Insurance.

The public can send written comments about the proposed increases to the Insurance Department until June 15. If the state insurance commissioner takes no action, the increases go into effect July 1.

"The real horror here is that these mammoth rate increases will fall on nongroup subscribers, people who buy health insurance individually," said Lance Haver, director of the city Office of Consumer Affairs.

"Many of these people will have lost their group coverage because they've lost their jobs, or because their employers have had to cut insurance to stay in business," he said.

Haver said the proposed increases would affect 25,000 local subscribers. He estimated that 5,000 people would drop coverage because they can no longer afford it.

Independence Blue Cross spokeswoman Elizabeth Williams said the increases were necessary because the insurer was paying out more in claims than it earned through premiums.

For example, in September 2008, a typical month, Independence Blue Cross brought in an average of $359 per month per contract for one type of insurance and paid out $416 in claims, for an average monthly loss of $57, the filings showed.

"We understand that in today's tough economic times, more people are purchasing individual health insurance, and we are committed to keeping premiums as low as possible," said Williams, who responded to questions in an e-mail message.

Families can pay as little as $336 a month, she said.

"The real problem is the escalating cost of medical care," she said.

Group coverage is cheaper because groups negotiate better rates and have more efficient handling of claims.

Also, unlike for-profit companies, Independence Blue Cross, a nonprofit, is required by law to insure everyone, even people with serious health problems.

The organizers of yesterday's sparsely attended protest had another agenda.

Haver and Mark Stier, who heads Health Care for America Now, a national health-advocacy organization, want to draw attention to a proposal to allow the government to set up a public health plan for individuals. Individuals could choose to buy insurance through a national government-operated group, getting the same volume discount that employer groups do.

The insurance industry has opposed that plan.

"We strongly support health-care reform," Williams said. "We believe that can be done without a government plan."

These days, unemployed telemarketer Jackson-Smith's two children, 19 and 17, are covered through a federal program. Her family makes ends meet, barely, by combining her unemployment benefits with her daughter's paycheck from a minimum-wage job as a newsstand cashier.

"I can't [afford] health insurance," she said.