Anthem Blue Cross rate increase: Business as usual

by Karoli on February 13, 2010 · 10 comments

I’m certain by now everyone knows about the Anthem Blue Cross 39% rate increase, now postponed until May at the earliest. It got attention this time because of the ongoing debate over health care reform, but it’s hardly unusual.

This was a 1989 headline: Health Insurers Planning Double-Digit Rate Hikes

From the article:

Blue Cross of California1 is planning a 20% increase for individual members. Its rate hike for group coverage may be even higher, but spokesmen declined to discuss that issue. Some other so-called “fee for service” insurers are expected to implement rate increases of up to 30%.

In 2005, Blue Cross was investigated for double-digit rate hikes which were alleged to have assisted financing of the sale of Wellpoint (Blue Cross parent company) to Anthem.

To win approval from state regulators, the combined company, now known as WellPoint Inc., pledged that Blue Cross’ 7.6 million California policyholders wouldn’t be saddled with any of the estimated $4 billion in expenses stemming from the deal — including financing and legal costs and severance pay for retiring executives.

Consumer activists, citing anecdotal evidence gathered from policyholders, testified that some Blue Cross customers were being hit with rate increases of 20% to 40% on individual and family coverage.

“These rate increases are much greater than seen in the past and have to be explained,” Flanagan said.

Although Blue Cross was cleared of any wrongdoing, the rate increases still stuck.

In 2009, Anthem Blue Cross raised rates by an average of 30% on individual and family health insurance plans. They had record profits in the 4th quarter of 2009 while covering less insureds. This follows the same pattern as United Health and other multistate insurers. Not satisfied with a mere 30%, and ever cognizant of the high cost of lobbying Washington to kill health care reform, they now felt the need to go for another 39% increase, completely unjustifiable.

This is not a new pattern. When Proposition 103 passed, requiring auto insurers to submit rate increases for approval with the state Insurance Commissioner, some companies suspended business operations in California or raised rates in anticipation of being regulated. Today, auto insurance rates are affordable, reasonable, and competitive.

There are rumblings here in California. The legislature has passed a single payer bill (sure to be vetoed by our current miserable excuse for a governor), and is making noise about passing a law to regulate health insurers’ rate increases in a similar fashion to auto insurance. This is why we need health care reform on a national scale. We need it because companies like Anthem Blue Cross will continue to reach for the money grabs using any excuse they can. For the past two years, they’ve claimed the recession is the problem. They claim this while their balance sheets show a healthy profit, they project healthy profits for 2010, and even while they lay off employees.

When you hear Republicans, press and pundits continue to tell us why we absolutely do NOT need health care reform of any sort, remember this: the current bills require rate increases to be approved in advance, for rates to be approved before companies can participate in the insurance exchanges, and for all exclusionary practices (including using rate hikes to knock older subscribers off the rolls, which is part of Anthem’s strategy) to be investigated on a national basis.

Then call your representative and tell them to pass. the. damn. bill.

UPDATE: Jason Leopold has more info on Go read it.

1Blue Cross of California is now Anthem Blue Cross
2 Note Republican candidate and current Insurance Commissioner Steve Poizner’s position on health care here. In typical Republican “markets are Gods” speak, he thinks loosening current requirements means more than regulating insurers. This is why California needs to get a Democrat in the governor’s office, among other things.

{ 9 comments… read them below or add one }

1 msaiwn July 8, 2010 at 9:31 am

How would that go? We will have something similar to Car Insurance Quotes

2 Anonymous August 16, 2010 at 10:02 pm

I couldn’t find them in any local business reviews website. Is it something fishy around or they have just opted out of this type of marketing strategy?

3 Cd Calculator Jumbo August 25, 2010 at 12:58 pm

The weirdest survey you ever took!
Copy and paste the questions and answer them!

Have your parents ever put you in an asylum?—-My parents put me in one when I was an embryo….they just had this feeling I might be a little…..weird.

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What color are your walls?—Unfortunately white…I want black….or neon green.

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Name 5 bands you love.—Aiden, My Chemical Romance, Chiodos, Papa Roach, AFI.

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Did/will you go to the vans Warped Tour this year?—I went!…YES YES YES!

Have you ever met someone born in the year 1595?—Yes…my mom. (Sorry mom)

Whats in your junk drawer?—Fake blood, calculator, deck of cards, random adaptors/cords, old mail, dvd’s, old cd cases, old cell phone, nail file, razor, tooth brush, floss, small bag of beads, other randomness I may not be aware of.

Am I weird?—Yes…I am weird.

Are you a paranoid dominatrix?—Yes….I’ve dominated Charlie Sheen before…but I was so paranoid I accidently whipped him til he bled…he sued me but I won cause I claimed temporarily insanity.

Do you listen to grindcore?—’s sweet.

Have you ever laughed during sex?—No but I’ve worked on math problems and operated on a porn star during sex.

What does the word “socialable” make you think of? (Said by drummer from 30 Seconds to Mars)—It makes me think of this girl that I met at a Panic At The Disco show…she was “socialable”.

Whats the dumbest thing you ever told your mom?—That it was me that spray painted the house orange and that dad was complaining of cramps and some of my pads were missing.

Have you ever been haunted by a one-legged pirate with 3 cigarettes in his mouth?—Every night! I burned his leg though.

4 Anonymous September 1, 2010 at 12:07 pm

The auto insurance industry has adapted well to the increases in recent years, blue cross should pay more attention to sectors outside the field of health insurance. There is potential to gain more customers with lower introductory rates in my opinion.

5 Paddle Brush September 5, 2010 at 9:36 am

This is cool! And so interested! Are u have more posts like this? Plese tell me, thanks

6 Anonymous September 17, 2010 at 3:43 am

How convenient for Anthem to announce that they are rasing rates for California health insurance before the HCR was close to being moved through Congress. Lies, lies and more lies from Corporate America. All these huge corporations, who believe they rule, will do what ever they have to keep the status quo. All these huge corporations need tighter regulation to protect all us little guys on Main Street. Small, medium and large companies are the backbone of our nation’s economy. Huge corporations suck them dry. Go back to local economies and stop the madness!

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