COMMISSIONER SENN CUTS BACK PROPOSED RATE INCREASES, PROMISES TO WORK FOR COMMUNITY RATING

OLYMPIA, Wash., Sept. 22 /PRNewswire / -- The following was released today by the Washington State Office of the Insurance Commissioner:

State Insurance Commissioner Deborah Senn and State Sen. Kevin Quigley (D-Lake Stevens) announced Friday (Sept. 22) that they will push to reinstate consumer protections that would have prevented this year's double-digit rate increases for thousands of health-insurance consumers.

Commissioner Senn announced that she was cutting back a proposed 19 percent rate hike by Blue Cross of Washington and Alaska, and a 34 percent rate increase proposed by Pierce County Medical Bureau. Commissioner Senn said she would approve no more than a 12 percent increase for Pierce County Medical and 11.5 percent for Blue Cross.

"It is my job to protect the public and consumers," Commissioner Senn said. "These huge increases would create rate shock and drive families and children off the system. I will not be a party to that."

"I fully expect these companies to take us to court, and we are prepared to fight them there. But the real fight will be in the Legislature," Commissioner Senn said.

Commissioner Senn said Senator Quigley, who appeared with her at a news conference on Friday, would sponsor commissioner-request legislation to restore community rating, which was stripped from the state's health-care reform law during the 1995 session.

"We've taken two steps forward and one step backward -- and the individual subscribers, the one group that doesn't have a paid lobbying staff in Olympia, is being asked to bear all of the costs," said Senator Quigley.

Commissioner Senn said it was industry lobbyists and anti-reform lawmakers who killed community rating, knowing full well that their actions would drive up insurance premiums for individual consumers.

"The purpose of the insurance reforms was to increase access to people who had been denied health insurance, but they were never meant to stand alone," Commissioner Senn said. "Community rating would have spread risk across the companies' entire customer base. Thus, the impact on rates would have been no more than 5 percent, and probably less."

"What we have today is actually two separate pools, and the companies are asking the smaller pool -- the individuals -- to bear the entire cost. That's not fair," said Commissioner Senn.

The rate increases apply to the companies' individual contracts. The increases would not affect the majority of Blue Cross and Pierce County subscribers, who are covered by group contracts.

Commissioner Senn noted that her staff had noted a number of inconsistencies in the Blue Cross rate filing. "It has been extremely difficult to analyze the BCWA's data or to verify the company's justifications submitted so far because much of the data has been incomplete, untrustworthy and, by the company's own admission, inaccurate," Commissioner Senn said.

She said those questions were not necessarily involved with the Pierce County Medical filing, although the size and abruptness of that increase posed its own problems. Commissioner Senn said both companies had been informed that they need to resubmit their filings if they want her to approve the 12 percent figure.

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/CONTACT: Belle Taylor-McGhee, Public Affairs Director, or Jim Stevenson, Public Information Officer, both of the Office of the Insurance Commissioner, 360-586-4422; or BBS, 360-664-0397; or e-mail, olympus.dis.wa.gov:/pub/ins_comm /

CO: Washington State Office of the Insurance Commissioner; Blue Cross

of Washington and Seattle; Pierce County Medical Bureau ST: Washington IN: SU:

JL-JF -- SE005 -- 0387 09/22/95 14:09 EDT