Hundreds of self-employed New Mexicans, including some in Santa Fe, could face another double-digit rate increase in their Blue Cross Blue Shield premiums less than a year after they had to swallow an average 21 percent hike from the company.

In early August, the company filed a rate request with the state for a 10 percent increase for individual plans. John Franchini, superintendent of the Insurance Division of the New Mexico Public Regulation Commission, said the request is under review.

Ed Oppenheimer, a self-employed Santa Fe graphic artist who's been a Blue Cross Blue Shield customer for nine years and testified during last year's 21 percent rate-increase hearings, can't believe the company is coming back so soon for more money.

"I feel helpless. I feel unprotected," said Oppenheimer, 63. "At this point, I'm just hanging on for Medicare. My government has failed me. The PRC has failed me. None of the legitimate questions raised in the hearings last year have been properly answered, and it doesn't appear they ever will be."

Victoria Rabinowe, another self-employed Santa Fe artist, received a letter that her Blue Cross BlueChoice insurance premium would increase from $474 to $521.79 beginning Nov. 1. This comes after the cost of medication she needs to control migraine headaches recently doubled to $75. Her deductible remains at $2,000.

The Aug. 29 letter says, "We try to provide you the health care coverage you need at a rate you can afford. Unfortunately costs continue to rise for our members' health insurance claims, new medical technologies and health care in general. These financial pressures are forcing us to adjust our rate."

If consumers don't like the situation, the letter says, they can switch plans or join the New Mexico Medical Insurance Pool.

As the nation and the state try to implement a new health care law by 2014, reining in both health care and health insurance costs remains the primary concern.

A quick retraction

Franchini and the state Insurance Division's chief life and health insurance actuary, Tom Bowling, say the Blue Cross letters went out by mistake. The company is saying little.

Bowling said soon after he received and reviewed the latest Blue Cross rate-increase request, he recommended approving it because he saw no issues. But, he said, Franchini asked him to hold off because the superintendent wanted to review the rate filing further. Bowling told the insurance company the approval was on hold and to postpone sending notices to policyholders. "But one mailing had already gone out," he said.

That's the letter that Oppenheimer, Rabinowe and Dr. Christopher Fletcher of Santa Fe Family Practice received in the mail recently.

The company was supposed to alert policyholders that the letter was a "mistake," but it hadn't done so by Friday.

Franchini said the company's rate-increase request says Blue Cross pays out $125 in claims for every $100 of premiums paid for the individual plans.

While the 21 percent increase last year affected more than 40,000 individual customers, this one potentially will affect 27,000 policyholders, Franchini said. Policyholders may have switched plans, moved to Medicare or simply dropped health insurance, he said.

Blue Cross Blue Shield of New Mexico did not answer questions about how many people would be affected by the most recent rate-increase proposal, whether customers had been alerted about the erroneous letters or why the increase was needed.

"Health insurance premiums must be sufficient to cover expected claims incurred by the entire pool of individuals covered under a policy product," said Blue Cross Blue Shield of New Mexico spokeswoman Becky Kenny via email. "For the last three years, BCBSNM has paid out more for member claims than we have collected in premiums for these particular individual products [those sold before Jan. 1, 2010]. When the Insurance Division has made a final determination on this rate filing, I can provide more details."

Neither Bowling nor Kenny provided the division's tracking number for the rate case.

Debating increases

"I think they do a terrible job of communicating their costs," Franchini said of health-insurance companies, including Blue Cross.

Still, Franchini lays most of the blame for rising premium costs on the way health care is delivered and on the increasing number of chronic health problems, such as diabetes and obesity.

"The problem is the cost of medical care is out of control now, and it is very difficult to cap it," said Franchini, who spent three decades in the insurance industry. "We're trying to cap it from the insurance side. But it really needs to come from the medical-care delivery side."

Family practitioner Fletcher, a BlueChoice policyholder who — as a Blue Cross preferred provider — treats hundreds of patients covered by Blue Cross, disagrees.

He said studies show the cost of medical care was going up 4 percent to 4.5 percent a year. "Not 10 percent, not 20 percent," Fletcher said. "Insurance is one of the most lucrative businesses to be in."

As a physician, he could charge whatever he wants. But what he actually gets paid is dictated by the contract he has with Blue Cross. The insurance company limits his reimbursement.

According to the state Insurance Division, health care costs in New Mexico are going up an average of 12 percent per year. Those costs include doctor visits, nursing care, hospital stays, laboratory tests and diagnostic tests such as X-rays.

Weiss Ratings, a company that rates the financial health of insurance companies, released a report earlier this year saying that nationally, medical expenses declined by 1.3 percent to 3 percent — the first decline in a decade.

A 2009 report by The Henry J. Kaiser Foundation, which analyzes health care policies and costs, says new medical technology, prescription drug use and the rise in chronic diseases have contributed the most to rising health care costs. Another Kaiser report found the increase in health-insurance premiums, out-of-pocket health spending and taxes for health care far outpaced both inflation and people's average gross income increases.

While Fletcher likes some things about Blue Cross, he thinks the company's rate increases are unreasonable compared with the cost of health care.

Fletcher said if this new rate increase is approved, it will be the fourth he and his wife have seen within a year: A 21 percent increase last winter and two additional increases when he and his wife each had birthdays. "Every five years, they raise your premiums $20 or more for age [regardless of health]," he said.

Given public anger over last year's rate increase, "I thought that they would have given up and not done this for a while," Fletcher said. "And this [new proposed rate increase] came out of nowhere. Nobody had heard about this."

Giving options to the uninsured and people with pre-existing conditions is what the federal Health Care Reform Act of 2010 is supposed to do.

Explaining hikes

Blue Cross Blue Shield insures one out of every three Americans through 39 health care programs. It is a major insurer in New Mexico for both groups and individuals.

Rabinowe and Oppenheimer understand some of the company's arguments for raising rates. They are part of a small pool of self-employed people. All the health care costs have to be spread among them. Some of them are high-risk.

But as two people who have stayed in good health, who have paid out of pocket for alternative health care to avoid filing Blue Cross claims and who have depended entirely on their own ingenuity for a limited income, they find the constant rate hikes untenable.

Worse is the lack of any substantive explanation for the rate increases, Oppenheimer and Rabinowe said.

Some New Mexico health insurers have decreased their premiums this year, according to information on the newly revamped state Insurance Division website. United Healthcare Insurance Co. decreased one of its New Mexico small-group major medical plans by almost 20 percent. Lovelace Health System Inc. reduced by 4 percent the premiums for one of its small-group major medical plans. Presbyterian reduced rates for one of its major medical group plans by 10 percent.

New rules unfolding

In New Mexico, one factor adding to increased premiums is the number of uninsured residents. As of September, 24.7 percent of New Mexicans had no health insurance, the second highest rate in the nation, according to the U.S. Census Bureau.

Hospital and other costs to care for the uninsured end up being passed on to those who have insurance.

A new federal health care act passed in 2010 is supposed to set up a system in which people without insurance, and those with pre-existing conditions, can afford to get insurance.

But the details are still unfolding, and there's pushback from some lawmakers in Congress who want to undo the law.

Customers lose out

Last year, when the state Insurance Division held a hearing on the Blue Cross Blue Shield rate-increase request, scheduled during work hours in the middle of the week, dozens of people made time to attend and voice their concerns. In the end, the PRC approved a reduced rate increase that averaged 21 percent.

Oppenheimer reviewed the dense, confusing rate filing and testified during the hearing. State Sen. Dede Feldman, D-Albuquerque, asked him to testify later at legislative committee hearings as the state sought more control over insurance companies. By the end, Oppenheimer felt it was all a sham.

The letter from Blue Cross for yet another rate hike this year only increases his feelings that the public — when it comes to health insurance — will always be on the losing end.

"I'm basically speechless, frustrated and hopeless on this," said Oppenheimer, 63. "Ratepayers don't have an effective way to respond to this."

He is convinced the new federal health care law will make little difference in easing the premium burden on consumers. He figures insurance companies — not just Blue Cross — will find the loopholes and keep making a healthy profit.

"If the past is any prelude to the future," he said, "they'll find ways to make as much money as possible out of this situation."

Franchini is more optimistic. "I think we as human beings have a way to resolve these problems and, working together, we can find a fair system."

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.