This past week Anthem Blue Cross of California has refiled with the Department of Insurance to raise rates for tens of thousands of California policyholders. Anthem and its corporate parent, Indianapolis-based WellPoint Inc., now are seeking a maximum increase of 20%, with an average hike of 14%. Their original proposal called for an average increase of 25%. The new rates would take effect September 1, 2010.
WellPoint defended the rising premiums as necessary and unavoidable, saying Anthem would still lose more than $100 million this year on individual health insurance policies sold in California even though 600,000 of its customers would be paying more.
Policyholders and consumer advocates "cry foul" that Anthem's initial rate increases as excessive, and fear that Anthem will try to recoup any losses with subsequent rate increases. Company officials said Wednesday they expect a new round of rate hikes in the first half of 2011.
WellPoint has posted a 51% increase in profits in the first three months of this year, compared to the same period last year, earning $877 million. Watch dog groups and some lawmakers said the Anthem controversy pointed to the need for legislation that would give regulators more authority over rates. California is one of a handful of states where health insurers can raise rates without state approval.
Don't count on Health Care Reform to solve this problem as the new law will provide access to health coverage for an estimated 32 million uninsured people but will do little to control rate hikes, simply giving federal officials the ability to review "excessive" increases.
Remember - Consumers have choices. With a dozen or so carriers and over 250 plans to choose from, you can always shop for insurance online and compare rates, benefit features and monthly premiums. To receive a free instant quote online visit QuoteBroker.