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New benefits raise concern over insurance rate hikes

It's been a long time coming, but pivotal elements of the federal health overhaul law will finally take effect next year. That's good news for kids, who will no longer be excluded from coverage because of preexisting conditions, good news for kid-adult hybrids, who will be able to stay on their parents' insurance plans until age of 26, and good news for adult adults, who will no longer face lifetime spending limits or retroactive cancellation of insurance plans.

But those and other benefits, whether or not they actually add to system-wide costs, might bring pricier premiums, thanks to worried - or perhaps opportunistic - insurance providers. Says Laurence Baker, PhD, Stanford professor of health research and policy, in a San Francisco Chronicle article:

"I can certainly see they (insurers) would look to the future and worry about how things would roll out and be more aggressive in the future about rates."

Concern that health insurance providers might take advantage of uncertainty around the federal overhaul was heightened earlier this year when Anthem Blue Cross instituted (and later withdrew) a 39 percent hike for individual members.

Warns Anthony Wright, executive director of Health Access, a statewide advocacy group:

"Regulators need to be vigilant in this period before the health reform kicks in with regards to health insurers gaming the system."

California legislators are considering several measures that would take different approaches to limiting rate hikes. Gov. Schwarzenegger favors a combination of closer scrutiny and greater transparency over regulation.

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