Anthem To Increase Premiums by Up to 25% for Grandfathered Plans

More than 300,000 Anthem Blue Cross policyholders who were allowed to keep insurance plans that were purchased before the Affordable Care Act was enacted could face premium increases of up to 25% beginning April 1, the Los Angeles Times reports (Terhune, Los Angeles Times, 1/30).

Background

Certain plans were canceled under the ACA because they did not meet the law's minimum coverage requirements. However, about half of state residents who had policies through the individual market have grandfathered plans that were purchased before March 2010, when the law went into effect (California Healthline, 11/12/13).

State officials and consumer advocates had warned consumers that continuing coverage under grandfathered plans could result in significant premium increases.

Details of Premium Hikes

According to the Times, Anthem rates are slated to increase by 16% on average on April 1. However, some premiums could increase by as much as 25%.

The change is expected to affect up to 306,000 policyholders.

According to the Times, the California Department of Insurance and state Department of Managed Health Care are investigating the increases and have requested additional information from Anthem.

Emily Rusch, director of the California Public Interest Research Group Education Fund, said, "We are very concerned Anthem proposed a rate hike this high without adequate justification."

Anthem's Response

Anthem said the increases are necessary because of the rising cost of health care throughout the industry.

However, the company noted that consumers can select a new plan that complies with the ACA if they do not want to keep their grandfathered plans.

Anthem spokesperson Darrel Ng said, "Many of the members affected here may be eligible for federal subsidies via the Covered California exchange and may have lower premiums if they decide to switch to an [ACA]-compliant policy" (Los Angeles Times, 1/30).