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DISB Halts Excessive Insurance Increases

Friday, March 19, 2010
Health insurance rates above 12 percent rejected after numerous consumer complaints about the high premiums for certain policies.

Washington, DC — The DC Department of Insurance, Securities and Banking (DISB) recently issued two orders to freeze certain rate increase proposals at 12 percent from CareFirst BlueCross BlueShield for several of its individual health insurance plans, based on numerous consumer complaints about the high premiums for certain health insurance policies.

Last year, CareFirst petitioned DISB to approve rate increases for its 2010 health plans to rates between 17.3 percent, and up to 35 percent above the 2009 premium rates. The increases would have affected the standardized Medicare supplement underwritten plan, the individual non-Medigap, PPO/blue preferred underwritten plan, and the individual standardized Medicare supplement non-underwritten plan. These proposed increases, approved by DISB in October 2009, were to go into effect on each individual subscriber’s anniversary date after January 1, 2010.

“DISB is concerned about the impact of these increases on District of Columbia residents,” said DISB Commissioner Gennet Purcell who signed the orders March 12, 2010. “It has been determined that it is in the consumers’ best financial interests that the premium rates be limited to a 12-percent increase over the 2009 rates for the 2010 renewal year.”

As a result of the recent spike in consumers’ complaints, DISB worked cooperatively with the insurer, which has agreed to accept DISB’s rescission of the higher premium rate increases; and to offer refunds in the form of future premium payment credits to the plans’ policyholders for any premiums paid in 2010 greater than a 12 percent increase above the rates charged in 2009. 

“Residents indeed have a voice, and are considered, in the determination of how this agency regulates the business of insurance, securities and banking in the District,” said Commissioner Purcell who added that DISB may authorize further examinations into CareFirst. “We encourage residents to continue filing both inquiries, as well as complaints with the agency, particularly if they only suspect a licensee’s activity is unfair, abusive or excessive.”