RATE HIKE BLUES: Health insurers unleash big premium increases despite record profits

Just as President Obama's push for health reform was threatening to collapse, big insurance companies may have given Democrats just the ammunition they need to win -- if they can capitalize on it.

In the wake of public outcry over WellPoint/Anthem Blue Cross of California's plan to jack up premiums by 39% for over 1 million members -- 10 times the rate of inflation -- news is emerging of similar rate increases across the South and country, driving up costs to consumers as high as 70%.

News reports show the premium hikes aren't limited to any one state or insurance company:

* GEORGIA: The Atlanta Journal-Constitution reports that Blue Cross Blue Shield of Georgia pushed up rates on one man by 72%. A BCBS-GA spokeswoman admits rates for many others are increasing up to 30%. WellPoint, a national insurer active in Georgia, jacked up premiums by 21% in 2009 and a similar increase is likely for 2010, according to a report released yesterday [pdf] by the Center for American Progress.

* NORTH CAROLINA: In North Carolina, the state Blue Cross Blue Shield affiliate "recently increased premiums 50 percent or more" for some members, "forcing them to drop coverage or switch to cheaper plans with fewer more markets across the country dominated by one or two insurers [...]

In 24 of the 43 states reported in the new AMA report, the two largest insurers had a combined market share of 70 percent or more. Last year, just 18 of 42 states had two insurers with a combined market share of 70 percent or more.

"The near total collapse of competitive and dynamic health insurance markets has not helped patients," said AMA President J. James Rohack, M.D. "As demonstrated by proposed rate hikes in California and other states, health insurers have not shown greater efficiency and lower health care costs. Instead, patient premiums, deductibles and co-payments have soared without an increase in benefits in these increasingly consolidated markets."Which is exactly what proponents of the public option have been saying all along.