Health insurers seek double-digit rate increases in Washington state — despite billion-dollar reserves

Health insurers want double-digit rate increases next year in Washington state. At the same time, several are sitting on billion-dollar reserves, reviving a debate about tapping those funds to reduce proposed rate hikes.

Pat Kinnaird of Kenmore was furious when she got a letter saying her longtime health insurer, Regence Blue Shield, decided not to offer coverage in King County next year, citing uncertainty in the market.

At the same time Regence is abandoning customers in Washington’s market for individual insurance, it is seeking rate increases in the state averaging 30 percent next year.

And the company is sitting on a $1.1 billion surplus.

“I think that’s abominable,” said Kinnaird, 73. “I don’t see how they can go before our insurance commissioner year after year and ask for raises in rates when they’re sitting on that cash.” (Though eligible for Medicare, Kinnaird buys her own insurance because others are more deserving, she said, of the government-insurance program for the elderly.)

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Regence is not alone, according to filings with the state Office of the Insurance Commissioner. Premera Blue Cross has proposed 28 percent increases, on average, and reported a surplus of $1.5 billion at the end of 2016. Kaiser Permanente is asking for rate increases averaging 13 percent and had a $917 million surplus.

Insurers say they need deep reserves in the event of unforeseen disaster.

All of which revives the question: Shouldn’t those reserves be used to reduce rate hikes?

That was the stance of Insurance Commissioner Mike Kreidler, who wanted a change in state law in 2012 allowing him to consider surpluses in annual rate reviews. But Kreidler was rebuffed by lawmakers who were sold on the insurers’ argument that they needed those cushions against market uncertainty, particularly with the implementation of the Affordable Care Act (ACA).

Kreidler, who said “I’m not giving up”on the 2012 quest, is now more sympathetic to insurers.

“Few insurance markets can go south quicker than health insurance, so the commissioner is tempering his views on the use of surpluses in light of the instability originating from the White House and Republicans in Congress,” said Steve Valandra, a spokesman for Kreidler.

Republicans are trying to sabotage the ACA, Valandra said in an email. They won’t enforce the ACA’s individual mandate, which expands…

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