California's largest health insurance companies will be increasing their average rates by 8% to 14% for hundreds of thousands of policyholders having individual coverage, leaping ahead of the overall medical care costs.
The national average cost of products and services associated with health care increased by 3.6% within the last year, as per government data. However, within the state, insurance premiums have continued to increase at a more rapid rate.
The Californian insurance companies defended the increase in rates, saying that they were based on the customer claims experience and not simply the rate of medical price inflation.
The insurance companies stated that due to the increasing rates, the policyholders who were in better health have been dropping out of the individual market and the economy continued to decline over the last few years. They explained that the policyholders who were left behind were those that had a higher average medical expense.
Darrel Ng, spokesperson of Anthem Blue Cross, the state's largest for-profit health insurer said that they would continue their examination of the fundamental issues that are leading to the increase in healthcare costs, including the prevention of chronic disease, increasing the quality of care and reducing unnecessary health expenses.
Consumer advocates have expressed skepticism as to whether the insurance companies are really making an all round effort to keep the costs to the minimum. Following closely on the heels of years that have seen increases of 20% to 30% for family coverage are these most recent rate hikes.