Blue Shield CA Cancels May 1 Rate Increase

Blue Shield of California has announced this evening that the health insurer is officially withdrawing the proposed May 1 rate increase. Blue Shield is further guaranteeing no further rate action for the remainder of 2011 on all CDI (CA Dept of Insurance) registered PPO plans (excluding HIPAA and Conversion). This affects approximately 340,000 California residents.

Blue Shield originally proposed a rate increase set for March 1, 2011 (The third since October , 2010). The carrier agreed to hold off 60 days on that rate increase to allow California Insurance Commissioner Dave Jones time to have an audit of the rate increase performed. The audit found the rate increase to be in-line and justified.

Those currently enrolled on Blue Shield CDI-registered underwritten PPO plans (not including HIPAA or Conversion) will have no rate change at all until at least 1/1/12.

Read Blue Shield's Press Release here

Dave (


  1. Let's see if I understand this.

    Blue Shield is bleeding red and will have a huge negative this year.

    The independent actuaries said the increase was correct.

    The insurance commission apparently convinced the company to not only cancel the increase, but to hold rates for the rest of the year.

    So my question is much longer can a company survive losing money and why did they agree to this?


  2. Good questions and I doubt we will ever get a good answer.


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