Some Policy Holders Want State To Investigate Blue Cross

banked nearly $200 million in profit last year and $145 million so far in 2004, but policyholders do not like learning their premiums are going up.

Small business owner John McMains pays $386 a month to insure his family with a $5,000 deductible. No matter the profit margin, Blue Cross recently notified him his premium would rise to $463.

"To slap some kind of rate increase like this, if all of my suppliers did the same sort of thing, I'd be in bad shape," he said.

"We're handing out some of the lowest premium increases we have in years," financial officer Dan Glaser said.

Glaser said the nonprofit is working to level off profits, but rising medical costs ultimately drive insurance rates.

"We continue to hear from customers out there who are having a hard time paying premiums," said Chrissy Pearson, of the state Department of Insurance.

Pearson said the state insurance department will seek legislation to allow it to dig into Blue Cross gains and possibly demand lower rates.

"If we're seeing policyholders that are being harmed by that and if there's anything we can do to change that, we feel like we need to step in and at least take a look," she said.

Because the bill only targets Blue Cross and no other insurers, spokeswoman Michelle Douglas said, "It's not only unfair, it's alarming. Essentially, the legislation would allow state regulators to run a private company."

For policy holders such as McMains,it is an issue of fairness.

"Medical costs are definitely on the rise, but a 20 percent increase is ridiculous," McMains said.

A group called ProCare has launched a petition drive that calls for tougher regulation of Blue Cross profits. ProCare led the fight against Blue Cross Blue Shield's bid to convert to a for-profit company.