Congress to investigate 39 percent premium hike by California's Anthem Blue Cross

Feb 10 2010

San Francisco Chronicle: "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." 

"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"  (Colliver, 2/10).

"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 Los Angeles Times reports. "The subcommittee has scheduled a Feb. 24 hearing in Washington." Rep. Henry Waxman, D-Calif., called the hike "deeply troubling" and said Congress needs "to know what possible justification there could be for increases of this magnitude." The insurer "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" (Helfand, 2/10).

The New York Times: Sen. Dianne Feinstein, D-Calif., "sharply criticized" Anthem Blue Cross and called the rate hike "a stark reminder of why any reform plan should establish a rate authority to keep insurance rates affordable." Feinstein also said in her statement that "she had urged state lawmakers in California to consider legislation that would empower the California Insurance Commissioner to regulate insurance rates." Anthem's rate increase "could serve to galvanize Congressional Democrats in Washington who have been struggling to get their big health care legislation back on track" (Herszenhorn, 2/9).