Anthem Blue Cross delays $40M Calif. rate hike
Tuesday, March 22, 2011
LOS ANGELES (AP) — Anthem Blue Cross, the largest health plan in California, said Monday it will delay and reduce rate hikes that would have hit some 600,000 policyholders at an estimated cost of $40 million.
Anthem is one of four major health insurers in the state who earlier agreed to put off premium increases for at least 60 days at the request of California Insurance Commissioner Dave Jones.
Los Angeles-based Anthem said it will delay a planned 16.4 percent premium increase from April 1 to July 1 and reduce it to 9.1 percent. The company also said it will put off increases in deductibles and co-payments from April 1 to Jan. 1.
“Our mission is to ensure quality health care for residents of the state at the most affordable price,” Anthem President Pam Kehaly said in a statement.
However, she said more must be done to halt the unrelenting rise of health care costs.
Taken together, the premium and benefit changes would have amounted to a 16.4 percent cost hike for policyholders in the middle of the year and might have forced people who thought they had met their deductibles to put off treatment, Jones said at a news conference.
That would be “akin to moving the goal post downfield in the middle of the game,” he said.
Anthem did not provide any dollar figures for how the 9.1 percent increase will affect policyholders.
However, Jones said delaying the increases will save California policyholders at least $40 million.
Anthem Blue Cross said it lost about $110 million on individual health insurance coverage in California last year and expected to lose money again this year despite the upcoming increases.
Last week, Blue Shield of California announced it was withdrawing its plan to increase health insurance rates for individual policyholders in what would have been the third such rate hike since October.
The three hikes combined would have raised rates by as much as 87 percent for some of its 200,000 policyholders, according to the state Department of Insurance.
The San Francisco-based nonprofit said it lost $27 million on individual policies last year and expects more such losses this year.
Two other insurers — Aetna and PacifiCare — also have agreed to delays.
Under state law, Jones has no authority to reject health insurance premium increases.
AB 52, a bill sponsored by Democratic Assemblyman Mike Feuer of Los Angeles that would give that power to the commissioner, is currently before the Legislature. Similar bills have failed in recent years.
Jones called on the public to back the bill.
Without it, consumers remain at the mercy of health insurers, Jones said.
Consumer rights groups also backed the bill and gave Anthem slight praise for its decision to delay the rate hike.
“Overall, this is a reprieve for consumers, though an almost 10 percent hike will still be hard for many to afford. And Anthem enrollees have to be worried about what will happen next year,” said a statement from Michael Russo, an attorney for the California Public Interest Research Group.
Anthem proposed a 39 percent increase last year at a time when its parent company, Wellpoint Inc., is making billions in profit, but Anthem eventually reduced the increase.
“If you buy health insurance in California, your only hope right now is that publicity and politics might convince some executives to scale back the rate increases, at least for a few months,” said Doug Heller, executive director of Consumer Watchdog, a Santa Monica-based advocacy group. “Insurance companies with huge profits aren’t nice guys just because they gouge us a little less.”
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