Lawmakers seek probes of Anthem Blue Cross
Victoria Colliver,
Chronicle Staff Writer
Wednesday, February 10, 2010
Angry lawmakers turned up the heat on Anthem Blue Cross on Tuesday, calling
for federal and state investigations into the California health insurer's
decision to increase rates by as much as 39 percent for thousands of
policyholders statewide.
U.S. Rep. Henry Waxman, D-Los Angeles, chairman of the House Energy and
Commerce Committee, led the way by scheduling a Feb. 24 special hearing on the
increases.
California Democratic Sens. Barbara Boxer and Dianne Feinstein also weighed
in Tuesday, with Boxer urging state Attorney General Jerry Brown to investigate
the proposed rate increases and Feinstein asking state Sen. President Pro-Tem
Darrell Steinberg, D-Sacramento, to introduce legislation to regulate rates.
"I can think of no better example of why we need health insurance reform,"
Feinstein said in a statement, calling Anthem's behavior a stark reminder of why
health premiums should be regulated.
The furor started last week when individual Anthem Blue Cross members - those
who are not covered under an employer or group policy - received letters
informing them that their monthly premiums would go up effective March 1.
Anthem, a Woodland Hills (Los Angeles County) insurer owned by
Indianapolis-based WellPoint Inc., has refused to disclose how many people are
affected or how high rates will rise, but the company has about 800,000
individual policyholders in California, and members have reported increases in
the range of 30 to 39 percent.
Under the backdrop of stalled national health reform, the Obama
administration has pointed to Anthem Blue Cross' actions as a reason
comprehensive overhaul is needed. At a White House briefing Tuesday, President
Obama said the increases are a sign of what will happen to many Americans
without reform.
Anthem's response to the increased scrutiny has been mostly silence. The
company has yet to respond even to Monday's request by state Insurance
Commissioner Steve Poizner to delay the rate increases until May 1 to give the
state time to investigate.
Increase on top of increase
Company officials say the increases are necessary because of increased
medical costs and a shrinking membership.
California has virtually no authority over health insurance rates, but the
state Department of Insurance plans to hire an outside actuarial firm to
determine whether the health insurer spends at least 70 cents of every premium
dollar on health benefits, as required by state regulation.
Feinstein on Tuesday urged Steinberg to introduce legislation to give the
insurance commissioner power to regulate rates, an authority that commissioners
in some 25 other states already have.
Anthem Blue Cross has instituted high premium increases in the past. Last
year, individual policyholders reported rate increases as high as 68 percent,
and many of the same members who were hit then said they received notice that
their premium would go up again this year.
Assemblyman Dave Jones, D-Sacramento, whose legislation to require that
health insurance premium increases be approved by state regulators failed in
committee last year, plans to hold a hearing Feb. 23 in Sacramento to address
not only Anthem's increases, but double-digit health premium increases across
the market.
"They (Anthem) have clearly made themselves the poster child for why we need
health insurance reform," he said, adding that he plans to reintroduce his bill.
Changed climate
Consumer advocates say the company's rate increases may not be new, but the
political and economic environment has changed.
"With the economy in the tubes, people are having a much harder time
affording these big increases," said Jerry Flanagan, health care policy director
for Consumer Watchdog in Santa Monica. "Also, the fact that health care is in
the political spotlight ... gives a political opening to talk about the reform
effort."
Waxman called on WellPoint Chief Executive Officer Angela Braly to produce a
detailed explanation of the proposed Anthem rate increase, along with evidence
showing claims history and profits for individual policies from 2005 through
2008. He demanded the information by Feb. 19, in advance of the Feb. 24
hearing.
WellPoint, which has about 34 million members nationwide, earned $4.7
billion, or $9.88 per share, in profit for 2009.
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San Francisco Chronicle