Neither the governor's office nor the Insurance Department could provide any specific examples of 50 percent increases.
"To shine a spotlight on this situation increases the chances that the carriers will be more moderate in what they do," Insurance Commissioner Joel Ario said.
The investigation will focus on whether insurance carriers are increasingly using medical questionnaires and drug profiling to set rates.
Both practices are legal in Pennsylvania, which allows medical underwriting - basing premium prices on the health of those insured.
However, Ario's investigation - centered primarily on premium hikes for small businesses - is not focused as strongly on the state's two largest insurers, Independence Blue Cross in Philadelphia and Highmark Inc. in Pittsburgh, because neither uses medical underwriting as a basis for pricing premiums for small business clients. Highmark had wanted to start that practice, but was dissuaded by the state.
Although all the insurers, including Independence Blue Cross, rely on medical underwriting when selling policies to individuals, the two largest Blues believe that they are at a competitive disadvantage in the small group market because they don't base premiums on medical history. Other insurers, according to area brokers, will look at medical history, deny coverage or hike renewal rates for groups with older or sicker people, forcing the customer to switch to Independence Blue Cross, which must insure all comers. That puts the two Blues in the position of having to insure a disproportionately large group of sicker and more expensive people.
