Blue Shield of California Ousted from State's High-Risk Pool Because of High Premiums

Blue Shield of California has been kicked out of the Major Risk Medical Insurance Program, the state's high-risk health insurance pool, because its premiums were much higher than those of other health insurers in the program.

Janette Lopez, chief deputy director for the Managed Risk Medical Insurance Board, said in a statement that a priority is making sure that uninsurable Californians have affordable choices in the program.

"At the end of the day, Blue Shield was not able to provide good value for our subscribers, so we were unable to renew their contract," Lopez said. The 83 people enrolled with Blue Shield will need to select other plans in the program, which will help them with the process, she said.

At a board meeting in September, staff presented a report from PricewaterhouseCoopers that said rates for the program must be set at 125% of the premium that would be offered to a standard insurable individual for a benefit plan matching the program benefit design.

The PwC report found that though Blue Shield's proposed 2010 rates increased at a lower percentage than the other participating program plans, "the rates continue to be at a level far higher than the other plans' rates."

Blue Shield's 2010 single subscriber rates generally range from about 1.3 times to nearly three times those of the other plans, the report found.

In a statement, Blue Shield said it "has always set appropriate rates that follow all legal guidelines." For 2010, the company said it reduced its rates at the request of the MRMIB, "but they chose not to renew our contract."

Blue Shield said it will work to ensure that its 78 high-risk-pool members have a smooth transition to another health plan at the end of the year.

Other insurers in the program include Anthem Blue Cross of California, Kaiser Permanente and Contra Costa Health Plan.

"This issue is a symptom of the larger problem with the health care system that leaves millions of Californians without coverage," Blue Shield said. "The solution, which we have advocated for more than six years, is universal coverage based on shared responsibility, with guarantee-issue, individual and employer mandates, expanded public coverage, and subsidies for those who need help."

Blue Shield of California Life and Health Insurance Co. currently has a Best's Financial Strength Rating of A- (Excellent).