Are more Californians finally ready to ditch the private, for-profit health insurance industry? Here comes yet another reason to do so. Last week, The Los Angeles Times reported that California insurance regulators approved Anthem Blue Cross rate hikes averaging between 14% and 20% on individual policyholders. Anthem competitor Blue Shield was allowed rate increases averaging between 19% and 29%. The hikes are to take effect Oct. 1.

The new rate hikes come months after public outrage forced Anthem to back off a 39% increase it proposed in February. But a 14% increase is supposed to be acceptable? That could be just enough to put coverage out of reach for many of Anthem’s customers, especially in an economy where wages continue to stagnate and jobs are few and far between.

According to the Times article:

The state Insurance Department said Wednesday the six-month delay saved policyholders $184 million, although Anthem, the state’s largest for-profit insurer, put the figure at no more than $150 million.

“These savings were a clear benefit to Blue Cross’ policyholders,” said Deputy Insurance Commissioner Byron Tucker.

I would say these “savings” are cold comfort to the millions of policyholders, many of whom may soon have to choose between health coverage and paying rent. A single payer system that cuts out leeches like Anthem would save Californians billions in revenue that are currently wasted on insurance company advertising, shareholder profits and bloated CEO salaries and perks. Angela Braly, CEO of Anthem’s parent company WellPoint, took home more than $9 million in compensation in 2007. Can someone please explain to me why Braly’s job is so valuable to sick patients that she merits earning $9 million? And she’s on the low end of health insurer executive pay!

The insurance companies have claimed for a long time that these rate increases are a necessary response to rising medical costs. That’s only partly true. The problem is that their operational model is completely unsustainable. The rate hikes will continue until America acknowledges that the for-profit model is a failure. A society cannot maintain an essential service – such as health care – as a money-making enterprise and expect it to be affordable for everyone.

Why doesn’t America accept health care as a public service as it does other essential services like police, fire departments, libraries, schools, parks, roads, tap water, sewage disposal and street lights? What is so different about health care – which is essential to life – that we must treat it as a commodity? Unless California and the rest of the country abandons the failed free-market approach to health care, more and more citizens will find themselves sick and broke.

Sylvia@californiaonecare.org