Patient trapped in health insurance rate hike

A patient's move from one Southern California community to another nearby triggers a 25% rate hike by Anthem Blue Cross despite no change in her care.

It's understandable that car insurance rates can change when you move. One neighborhood might have more accidents or burglaries than another.

But health insurance?

Joan Swope, 62, moved recently from Cathedral City, just down the road from Palm Springs, to nearby Palm Desert.

She informed her insurer, Anthem Blue Cross, of the change of address. A few weeks later, Anthem responded with a notice stating that, because of the move, Swope's monthly premium on her individual policy will increase to $524 from $418.

That's a more than 25% rate hike. For a move of less than 10 miles.

"It's ridiculous," Swope told me. "I'm going to the same doctor. I'm going to the same facilities and the same drugstore. Nothing has changed."

Nothing except her ZIP Code. And in the actuarial world of insurance, that's a sufficiently life-altering event to justify an extra $1,272 in annual payments — on top of a $5,000 deductible.

And here's the real kick in the teeth: It's perfectly legal.

"Health insurers are permitted under the law to charge a different price when someone relocates to a different rating region," said Janice Rocco, California's deputy insurance commissioner for health policy.

What that means is that insurers have carved the state into various zones based on the average cost of local doctors and hospitals. Cross from one zone into another, and your rates can skyrocket.

But what about a situation like Swope's? She may now live in a new rating zone, but her interaction with the healthcare system is the same as it was before — same doctor, same hospitals, same druggist.

I asked Rocco if that was fair.

All she'd say was that the federal healthcare reform law empowers the state to redraw insurers' rating regions by 2014. She said it will be up to the Legislature to do a good job of it.

Anthem acknowledged that Swope informed that company of a new billing address when she moved last year to Cathedral City from Camarillo. And the insurer said it sent her bills to a post office box in Cathedral City.

But Anthem says Swope never explicitly said that her billing address and home address were one and the same. As far as the insurer was concerned, she still lived in Camarillo, even though her bills were being sent nearly 200 miles away.

Burton Swope, Joan's husband, said they had no such problems with any other company they do business with. All of them, including their car insurer, figured out on their own that the couple had moved.

"Any idiot could look at my wife's medical bills and see that she was now in the Coachella Valley," he said. "Everyone got it except Anthem."

Kristin Binns, an Anthem spokeswoman, suggested that Swope should consider herself lucky. Her monthly rate should have increased by about 19% when she moved from Camarillo to Cathedral City, before rising again with the move to Palm Desert.

Binns indicated that Anthem won't try to shake down Swope for any under-payments resulting from the insurer not quite understanding where she resided.

That's nice of them. But what this really shows — as if more proof were needed — is the utter lunacy of our healthcare system.

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