HHS secretary asks insurer to justify rate hike -- 39% INCREASE!!!

[DEDixon 39]

The Obama administration on Monday asked California's largest for-profit health insurer to justify plans to hike customers' premiums by as much as 39 percent, a move that could affect some 800,000 customers.

In a letter to the president of Anthem Blue Cross, Health and Human Services Secretary Kathleen Sebelius said she was very disturbed to learn of the planned increases, calling them "extraordinary." She said they were hard to understand in light of the profitability of Anthem's parent company, WellPoint Inc.

"I believe Anthem Blue Cross has a responsibility to provide a detailed justification for these rate increases to the public," Sebelius wrote. She said the company should also make public what percentage of customers' premiums go to medical care versus administrative costs.

Peggy Hinz, a spokeswoman for Anthem, said she would check whether the letter had been received.

President Barack Obama cited the Anthem rate hikes in an interview with CBS' Katie Couric on Sunday as a reason to move forward with his health overhaul legislation, which is stalled in Congress.

"That's a portrait of the future if we don't do something now," Obama said. "It's gonna keep on beatin' down families, small businesses, large businesses. It's gonna be a huge drain on the economy."

The Los Angeles Times reported the rate hikes last week. They could affect many of the approximately 800,000 customers who purchase insurance directly from Anthem, as opposed to getting coverage through their employers.

Anthem notified customers that rates would go up beginning March 1 and might increase more frequently going forward than the usual annual increase. The increases ranged from 30 percent to 39 percent.

The company has declined to provide details on the rate increases such as how many people would be affected or how much the new rates would be. It's also not clear whether customers in other states are being affected. In a statement last week the company blamed the increases on rising costs of medical care.

"We understand and strongly share our members' concerns over the rising cost of health care services and the corresponding adverse impact on insurance premiums," the statement said. "Unfortunately, the individual market premiums are merely the symptoms of a larger underlying problem in California's individual market — rising health care costs."

California Insurance Commissioner Steve Poizner is hiring an outside actuary to determine whether Anthem is spending at least 70 percent of premium dollars on medical care as opposed to administrative costs, as required by state regulations. Poizner's spokesman, Darrel Ng, said that's the only recourse because the state doesn't have authority to sign off on rates.

WellPoint earned $536 million in the final three months of 2009, not counting roughly $2.2 billion it gained in the fourth quarter for the sale of a pharmacy benefit management subsidiary. The Indianapolis company is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.

http://www.sfgate.com/cgi-bin/article.cgi?...;type=printable

[Dan J 277]

Its the price to protect "freedom" and "choice".

[DEDixon 39]

i wonder if those that are not in favor of health/insurance reform work for themselves. i wonder if they have EVER faced an insurance company as an individual rather than through a group plan offer by a multinational company. i wonder if they know what it feels like to be denied or to get a quote for a monthly premium that exceeds their budget.

when i think of health care reform, i think about how america's employment has changed. i'm too lazy to look up the numbers (labor department probably has them), but self employment probably has grown by many 100s of percent.

the self-employed have lots of problems getting insurance if they have any pre-existing conditions. also, if they need to insure their family, if anyone in the family has a pre-existing medical condition, the whole family is at risk.

industries that used to hire employees now contract with the self employed or very small companies for "the job" these days. even the person that comes to turn on my cable TV (if i ever did such a thing) is contracted so the cable company doesn't have to hire and thus provide benefits. often the big companies contract with companies that are small and those companies don't offer insurance or any other benefits to their employees.

just saying, i favor health/insurance reform because the way people are employed in the US has changed. the foundation for the current health coverage model has collapsed.

[DEDixon 39]

Anthem asked to justify rate hike in California

LOS ANGELES – In his push to move stalled health care reform, President Barack Obama is appealing to American pocketbooks by calling one health insurer's major rate hike in California a harbinger of rising premiums.

Anthem Blue Cross' 30 to 39 percent rate hike in California will affect an unknown number of its 800,000 individual policyholders — the insurer has declined giving specifics. But Obama said the rate hike is a sign of what will happen to many Americans without reform.

"Premiums will continue to rise for folks with insurance, millions more will lose their coverage altogether, our deficits will continue to grow larger," Obama said Tuesday at a White House briefing. It was the second time in a week Obama publicly cited the Anthem rate hike as a reason Congress should advance stalled health reform legislation.

Calling renewed effort on both sides of the aisle, Obama told reporters that "without some action on the part of Congress, it is very unlikely that we see any improvement over the current trajectory" of rising premiums.

A congressional hearing will be held Feb. 24, at the request of Rep. Henry Waxman, D-California, and Bart Stupak, D-Michigan. They requested information from the company on its rate increases, calling on Angela Braly — president and CEO of Anthem's parent company, WellPoint Inc — to testify.

In a Tuesday post to the White House blog, Health and Human Services Secretary Kathleen Sebelius repeated demands that Anthem, California's largest for-profit health insurer, answer questions on how much profit the insurer will reap from the hike. Sebelius issued a sternly worded letter to the company on Monday.

California Insurance Commissioner Steven Poizner announced an inquiry into the rate hike on Monday, which doesn't require the state's approval, to ensure that it abides by state regulation and 70 percent of income from premiums will be directed to medical costs.

In an interview Tuesday with the Associated Press, Poizner said Anthem had not responded to his letter, adding the insurer "would be quite wise to postpone their rate increase" until after his department's review.

"Anthem Blue Cross, or any health insurance company, can't pick and choose who to raise prices on," said Poizner. "Part of our analysis of what Anthem Blue Cross is doing is we're going to make sure they're not discriminating" against a segment of their customer base.

Poizner is vying for the Republican nomination in the next California gubernatorial race.

Anthem also has not issued response to Obama or his administration. In a statement Monday, the insurer blamed the weak economy and rising health care costs for its rate hike, while pledging to reply to Sebelius' query promptly.

Health insurance analysts agreed that the rise in individual premiums will be echoed on a smaller scale in the rest of the marketplace. Employer-based insurance and group policies will likely see 10 to 20 percent increases in the next year, said health industry consultant Robert Laszewski.

About 13 million Americans purchased health insurance through the individual market in 2008, the most recent data available. Surges in their premiums can be explained by competing interests: Insurance companies are working to maintain earnings expectations in the face of rising costs, while rising premiums are driving healthy people to drop coverage, Laszewski said.

California's Democratic Sen. Dianne Feinstein on Tuesday called the rate hike unconscionable, saying it was proof of the need for reform. She also called for Congress to remove the health insurance industry's antitrust exemption "to ensure a fair, competitive market is not dominated by a handful of companies."

Various insurers have mandated rate hikes on individual policies across the country in recent years, though California's increase is larger than most. Last month, Anthem Blue Cross and Blue Shield filed for a 23 percent rate hike on 11,066 individual policies in Maine. In November, Oregonians holding individual policies with Health Net Health Plan of Oregon faced a 22.8 percent hike.

The Los Angeles Times first reported the California rate hikes last week. Anthem notified customers that rates would go up beginning March 1 and might start increasing more frequently than the usual annual increases. The company declined to provide details on the rate increases, such as how many people would be affected or how much the new rates would be.

It's also not clear whether customers in other states are being affected.

Indianapolis-based WellPoint is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.

http://news.yahoo.com/s/ap/20100210/ap_on_...surer_rate_hike

[scandal 951]

"That's a portrait of the future if we don't do something now," Obama said. "It's gonna keep on beatin' down families, small businesses, large businesses. It's gonna be a huge drain on the economy."

Wow, is that really what our President said? And here I thought he was the eloquent one.

Regarding Anthem - NPR did a piece on this today. They noted that one of the key factors leading to the increase has been the number of young and healthy members who have dropped out of coverage, leaving a pool of relatively elderly and sick members remaining. It becomes a vicious circle - the more people drop out, the higher the premiums go, the more this causes more healthy people to take their chances and drop out, eventually leaving only those desperate for coverage at any cost who must pay sky high premiums.

Hence, one portion of comprehensive reform MUST be individual mandates to require everyone to have coverage. It's the only way the system can function. Universal coverage isn't just good social policy (since everyone really should have coverage in the event of catastrophic illness or injury). It's also a necessary ingredient to a solvent and financially viable system of insurance.