Blue Shield of California members can breath a sigh of relief after the company announced that they were withdrawing their rate increase and guaranteeing members that rates would not increase again in 2011.

Blue Shield customers received notices earlier this year telling them that rates were going up effective Feb 1st, and a second notice was sent to some customers about another increase in rates with a March 1st effective date. The CA Insurance Commissioner rejected the March 1st rate increase and asked Blue Shield to supply proof that the March rate increases were an actuarial necessity. This was the second time in less than a year that the Insurance Commissioner rejected an insurance company’s rate increase.

In the spring of 2010, Anthem Blue Cross announced rate increases of up to 49%. The public outcry and the CA department of insurance rejection of those proposed increases led to a public backlash against the insurance companies. After a thorough actuarial analysis, Anthem Blue Cross eventually raised their rates in October 2010, but by a smaller amount than the springtime request.

At SPF Insurance Services we thought the 2nd increase would be delayed by many months and recommended that our clients wait to see what would come from the March 1st rate increase before deciding what the next step was. As a result, our clients did not have to go through the hassle of applying for alternative coverage during this busy time of the year, only to discover that the rate increase isn’t going to happen.

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