March 17th, 2010

Philly.com reports:

Carolyn Johnson’s monthly health-insurance premiums nearly doubled this month, from $313 to $600 – a tough jump for a laid-off legal assistant who lives with her retired father and gets by on unemployment benefits.

In this case, the staggering 92 percent rate increase was not imposed by an insurance company but by the state of Pennsylvania. Johnson’s coverage is equivalent to the adultBasic plan provided by the state’s Insurance Department, headed by a commissioner who has been active in pushing for sweeping changes to the nation’s health-care system.

“You are not going to find me defending this as a good choice,” said Insurance Commissioner Joel Ario, who sat next to President Obama at a recent White House conference on insurance.

“Among the horrible choices, this is the least obscene,” Ario said, blaming the increase on the rising costs of medical care.

Pennsylvania’s adultBasic is a state-run health-insurance program for the unemployed and financially distressed. That’s what makes this increase so onerous, said Jonathan Stein, a lawyer with Community Legal Services and a frequent critic of insurance companies.

“Essentially the state and [the nonprofit Independence Blue Cross] are acting like a for-profit insurance company, pricing people who are needy out of insurance,” he said.

In February 2007, Johnson, 53, lost her job as a legal assistant. She eventually went on the waiting list for Pennsylvania’s subsidized adultBasic plan.

The program, administered in this area by Independence Blue Cross, is partly funded by payments to the state from the four Blue Cross insurance companies that sell policies in Pennsylvania.

Independence Blue Cross paid $61 million last year, of which $36.6 million underwrites the adultBasic program, Independence Blue Cross spokeswoman Elizabeth Williams said.

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