Blue Cross, the major insurer for hospital care in the Washington area, has begun notifying more than 100,000 area subscribers that their premiums will increase from 47 to 60 per cent beginning April 1.
Although a matter of only a few dollars a month for some policyholders, the increase will amount to several hundred dollars a year for thousands of nongroup policyholders.
The basic reason forthe new rate, according to a Blue Cross spokesman, is hte estimate 15 per cent increase in the cost of hospital care here last year. Additionally, according to Blue Cross public relations manager Raymond Freson, Blue Cross underestimated the increase a year ago and failed to raise its rates enough to compensate.
The average daily cost in a Washington area hospital is now about $213, according to Blue Cross.
The problem of increasing hospital care costs, the major portion of the local and national health bill, has prompted the Carter administration to consider imposing a strict limit on how much hospitals can charge patients.
The premium increases being announced for April 1 are for individual and family policyholders who are not members of a group contracting with Blue Cross but who deal directly with the hospital insurer.
Most such policyholders also have Blue Shield insurance, which covers certain physician's expenses. Blue Shield is raising its nongroup rates for policyholders who also subscribe to Medicare, but not for other nongroup policy holders.
As a fresult of the new prenuim increase, a family with 180 days of hospital coverage will pay about $857 a year instead of $549, an increase of 56 per cent. For a single person wiht similar coverage, the rate increases from $291 to about $440, or 51 per cent.
Families with 30 days of hospital coverage will pay $647 a year, instead of $409, an increase of 58 per cent. For a single person with 30 days of coverage, the rate increases from $195 to $309, or 58 per cent.
Former federal employees who have bought the six-month hospitalization plan will find their family rates going from $554 a year to $862, an increase to $308 or 55.6 per cent.
Holders of Medicare policies who use Blue Cross and Blue Shield to pay what Medicare does not, will pay premkum increases for hospital and doctor plans of about 43.5 per cent for both.
Blue Cross Premiums for Medicare clients will increase from $27 to $72, or about 60 per cent. Blue Shield premiums (for doctors' costs) for Medicare clients will go to $170, from the current $123, an increase of $46 or about 35 per cent.
About 50,000 policyholders will be affected. Blue Cross estimates that about 30,000 of its nongroup policy-holders are Medicare clients and that the other 20,000 use Blue Cross as their primary coverage for hospitalization.
Increases for nongroup policyholders bear no relations to claims filed by an individual or family with Blue Cross. In contrast to a group, whose rates are determined by the claims it has filed, nongroup individuals and families have rates determined by the aggregate experience of all nongroup policyholders.
According to Freson, nongroup policyholders tend to be older and to buy the coverage because they feel they need it, rather than having the coverage extended to them as part of employment benefits, as it is the case with group policyholders.
Freson said a rough analysis of Blue Cross data found that group policy-holders used about 1,500 hospital days per 1,000 family policies as opposed to 2,400 hospital days per 1,000 family policies for nongroup holders. Or, Freson said, the average stay for a group policy holder was 5.9 days as opposed to 7 days for a nongroup policy holder.
One policyholder, who asked not to be identified, said that the notices of a premium increase-in his case about 56 per cent or $308-had prompted him to consider switching to a prepaid health insurance plan that would cover physician as well as hospital expenses.
"I think they're pricing themselves out of business,% this policyholder said of Blue Cross. "This policy I have is lodging, really-no X-ray, no doctor . . . It just seems to be an absolute runaway inflation."