Blue Cross of CA

There has been a flurry of investigation and inquiry into rate policy at Blue Cross of CA in 2005.

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Investigators refer to acquisitions and other business activities of Blue Cross’ parent company ‘Wellpoint’, and question the motivation for these rate adjustments.

Competition in California is fierce, and health insurance shoppers have numerous options for coverage. While investigators may have a point regarding Blue Cross rates, how can the longterm policy of raising rates help Wellpoint if consumers choose other health plans because they are cheaper?

Competition will beat regulation (almost) every time. If Wellpoint, and Blue Cross of CA, had a monopoly in California then the investigation would carry far more importance in our opinion. Since, they do not have a monopoly (not even close), we feel that the noise is useful for politicians who need to show concern for health care costs. Nothing meaningful will occur related to these allegations, but almost certainly something symbolic will.

Watch for promises and policy changes from Wellpoint, and proclamations and self congratulations from regulators.

Rxeo

Update:
This was settled with a $150,000 fine (snore.) but another lawsuit that could affect Blue Cross Blue Shield rates in Geogia and Blue Cross rates in California has big news here..