odd time signatures

Anthem Blue Cross rate increase: Business as usual

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 truthout.org. 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.

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