Health care reform is about covering those who don’t have health coverage. And health reform is just as much about the millions in America who have insurance that is too expensive or covers too little to be of much use.

There are millions of underinsured people in America. That underinsurance presents similar problems to uninsurance – delayed and denied care, bankruptcy due to medical costs, poorer health, and ultimately higher costs when these people have to seek emergency care or treatment for preventable illnesses. And many of the people with lousy insurance are those with individual insurance policies which they buy on their own instead of getting through work.

Unlike large businesses, who can bargain with insurance companies for good rates and good coverage because they have leverage in their numbers, the self-employed, unemployed, or people who don’t get insurance through work have to buy coverage on their own. It’s just them against their insurance company. So, people on the individual market tend to get hit with the highest rates, the most denials of care, and see the least of their premium dollars spent on their health care. Many small businesses face the same issues.

News today only underscores the problems in the individual market:

California’s largest for-profit health insurer is moving to dramatically raise rates for customers with individual policies, setting off a furor among policyholders and prompting state insurance regulators to investigate.

Anthem Blue Cross is telling many of its approximately 800,000 customers who buy individual coverage — people not covered by group rates — that its prices will go up March 1 and may be adjusted "more frequently" than its typical yearly increases.

The insurer declined to say how high it is increasing rates. But brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30% to 39%, saying they come on the heels of similar jumps last year.

Many policyholders say the rate hikes are the largest they can remember, and they fear that subsequent premium growth will narrow their options — leaving them to buy policies with higher deductibles and less coverage or putting health insurance out of reach altogether.

"I’ve never seen anything like this," said Mark Weiss, 63, a Century City podiatrist whose Anthem policy for himself and his wife will rise 35%. The couple’s annual insurance bill will jump to $27,336 from $20,184.

"I think it’s just unconscionable," said Weiss, a member of Blue Cross for 30 years.

Insurers already spend dramatically less of each premium dollar from individual policies on actual care. Where the average "medical loss ratio" of private insurance companies is around 86% – which means only 86 cents out of every dollar is spent on actual medical care and not CEO salaries, overhead and profit – medical loss ratios for individual policies can routinely be as low as 70%, or even lower. Now on top of that, Anthem, owned by WellPoint, is increasing rates in California by almost 40%.

This exact problem – individuals having to fight with insurance companies on their own for decent, affordable coverage – is what health reform is designed to solve. Individuals and small businesses would be able to purchase coverage in a new, regulated insurance marketplace, called an "exchange. " Insurers would be required to sell good policies, without caps on annual or lifetime benefits and would not be allowed to turn people away because of a pre-existing condition or charge more because someone has a health condition. Medical loss ratios would be regulated. The Congressional Budget Office says this will lower premiums dramatically.

And the strongest version of the exchange will be run by the federal government and include the choice of a public insurance plan to compete with private insurance.

Today’s news of near 40% rate hikes simply underscore why Congress must finish health reform now and finish it right. We can’t wait any longer.

(also posted at the NOW! blog)

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