Individual Health Insurance in California

Individual health insurance rates for some California residents are going up 10 or 11 percent next year.

Jeff Aran has bought his own HMO policy from Kaiser Permanente since the mid-1980s. The last few years he's noticed his premiums are consistently 2 percent or 3 percent above the health insurance rates that the California Public Employees' Retirement System gets from the same Oakland-based health maintenance organization (Kaiser Permanente).

Aran and the 2.5 million Californians like him who buy individual health insurance may one day look back on 10% rate hikes as the good old days.

Individual & family policyholders have enjoyed slower premium increases from recent trends that have tamed medical costs a bit.

Baby boomers are generally healthier than previous generations and lower-cost generic drugs have flooded the market. The wave of health insurance company mergers that swept the industry a few years ago has abated. Negative press has also put some pressure on health insurers to hold down premiums.

Individual health plan policy owners will be hardest hit. Health care insurers don't make much money on individual plans, which cost more to administer, he said. As a result, the insurers are more likely to significantly raise those premiums when times get tight.