Congress opens probe into Anthem Blue Cross rate increases

latimes.com/business/la-fi-anthem10-2010feb10,0,2234973.story

latimes.com

Congress opens probe into Anthem Blue Cross rate increases

Two House panels announce they are investigating the hikes, which take effect March 1. Lawmakers ask the company's CEO to explain the reasons for the increases.

By Duke Helfand

February 10, 2010

Congress opened an investigation Tuesday into Anthem Blue Cross' impending rate increases in California as President Obama cited the premium hikes -- some as high as 39% -- in his bid to pass national healthcare legislation.

The House Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations announced they were examining the increases, which are set to take effect March 1. The subcommittee has scheduled a Feb. 24 hearing in Washington, while an Assembly committee in Sacramento has set a hearing for Feb 23.

"Reports of premium increases up to 39% are deeply troubling," Rep. Henry A. Waxman (D-Beverly Hills), who chairs the energy committee, said in a statement. "At a time when millions of Americans are struggling to keep their health insurance, we need to know what possible justification there could be for increases of this magnitude."

Anthem of Woodland Hills is the state's largest for-profit insurer and a unit of Indianapolis health insurance giant WellPoint Inc. A WellPoint spokeswoman said the company was reviewing a request by Waxman and Rep. Bart Stupak (D-Mich.), chairman of the subcommittee, for Chief Executive Angela F. Braly to testify before the subcommittee.

At issue are increases in monthly premiums for many of Anthem's estimated 800,000 customers with individual health insurance policies who are not part of group coverage.

Anthem began informing individual policyholders last month that prices would go up March 1 and could be adjusted "more frequently" than typical yearly increases.

The company would not say how high the rates could go or how many customers would be affected. Brokers and policyholders said many of the anticipated increases were 30% to 39%, the largest they could recall. The brokers said other insurers also were raising rates by double digits.

Anthem maintains that its increases are necessary to meet growing healthcare costs, even as it voices sympathy for policyholders whose premiums are rising. The company has said that it is striving to solve the problem.

"We are engaging with a broad range of key stakeholders across California to discuss the state's individual insurance market and share ideas on how we can collectively partner on meaningful change," the company said in a statement Monday.

On Tuesday, Democrats in Congress and the state Legislature followed California's Republican insurance commissioner, who on Monday asked Anthem to reevaluate its increases. Commissioner Steve Poizner called on the company to delay its hikes until May 1 while a state-appointed independent actuary evaluates them.

U.S. Sen. Barbara Boxer (D-Calif.) asked state Atty. Gen. Jerry Brown to investigate. In an interview, Brown said, "We are actively pursuing this matter," adding that his office was trying to determine whether state law on unfair business practices applies in this case.

Meanwhile, Assemblyman Dave Jones (D-Sacramento), chairman of the Assembly's health committee, called on Anthem to rescind the increases and announced plans to hold a Feb. 23 hearing to examine Anthem and other California health insurers.

President Obama told reporters in Washington on Tuesday that Anthem's rate hikes highlighted the need for healthcare reform.

"If we don't act, this is just a preview of coming attractions," Obama said. "Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger. And we have an obligation -- both parties -- to tackle this issue in a serious way."

The insurance industry's Washington-based lobbying arm, America's Health Insurance Plans, said carriers were not to blame for the swift expansion of healthcare costs. The group said the price of hospital care, prescription drugs and doctors was propelling the largest growth in healthcare spending, as a share of the nation's total economic output, since the government began keeping track half a century ago.

The national association also said that rising premiums were driven by burgeoning numbers of uninsured who rely on expensive emergency room services and by employers that are cutting health benefits in a still-sputtering economy.

duke.helfand@latimes.com