Yes, rising health care costs are even forcing not-for-profit Blue Shield of California to hike premiums.
This news will be unsettling for many of the political left who continually blame profit-hungry insurance companies for driving premium hikes.
As the Wall Street Journal editors explain, costs don’t magically disappear because politicians mandate a whole new array of health benefits:
Why, yes. The first company is Anthem Blue Cross, the California unit of for-profit WellPoint, and the second is Blue Shield of California, a not-for-profit that is a member in good standing of the government health-care booster club. This discrepancy poses something of a problem for Democrats.
Blue Shield recently filed three cumulative rate increases that will raise average premiums for consumers in the individual market by 30% over two years. The jump primarily reflects the underlying cost of medical care, including an average rise of 19% in 2010 and expected increased for 2011 that will average 6.5%. The tab also includes a 4% jump solely to pay for required ObamaCare benefits like allowing 26-year-olds to remain on their parents' policy.
None of this is unusual. The laws of economics apply even to nonprofits, which aren't charities despite their tax status, and their premiums have to pay for the doctors, hospitals and drugs their customers use. Medical costs continue to rise despite the reform that President Obama claimed would lower them, even as it mandated benefits that many people didn't value enough to buy on their own.
Yet when Anthem floated that 39% jump last year—it was 24% on average—President Obama denounced it as "jaw-dropping." Health and Human Services Secretary Kathleen Sebelius called it a gambit to "keep their profit margins going" and lavish compensation on WellPoint executives. Henry Waxman launched a formal investigation. In California, Assemblyman Dave Jones asked Anthem president Leslie Margolin at a hearing, "Have you no shame?" He also asked "How much profit is enough?" and participated in a rally against industry greed at Anthem's headquarters.
The attack on Anthem was in part demagoguery to lift an entitlement that was losing political altitude and in part retribution against WellPoint for accurately predicting that insurance costs would soar under ObamaCare. Yet now a nonprofit is making similar claims about the relation between premiums and benefits. And that company is none other than Blue Shield of California, the model liberal corporate citizen that has long supported policies like ObamaCare. In 2007, it joined with labor unions to lobby for Arnold Schwarzenegger's failed California plan.
