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Blue Shield of CA cancels insurance rate hike

By Los Angeles Times  
   March 17, 2011

Blue Shield of California's decision to cancel a big rate hike for nearly 200,000 people followed mounting pressure from the public and political leaders. But an unforeseen factor may have made the retreat easier for the company to accept: It's paying out less for medical claims than it had anticipated. And it's not just Blue Shield. Major insurers including WellPoint Inc. and Aetna Inc. also say that medical spending has been lower than projected recently, saving the companies millions of dollars in payouts. Company officials say that is largely because people are going to the doctor less. Many have switched to cheaper policies that require them to shoulder a greater share of the cost—and that has them thinking twice about discretionary visits. That trend could bolster the arguments of some healthcare experts who contend that Americans overuse medical services because they generally don't have to pay much for them, and that the only way to bring rising healthcare costs under control is to shift more of the expense to patients.

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