Anthem Seeks To Hike Individual Plan Rates by an Average of 18%
Anthem Blue Cross is proposing premium rates hikes that average 18% for more than 630,000 individual policyholders, the Los Angeles Times reports.
Details of Proposed Rate Hikes
According to the insurer's rate request, some policyholders could experience premium increases of as much as 25% in February 2013.
Anthem also is seeking a separate rate hike averaging 15% for an additional 100,000 policyholders whose plans are regulated by the state Department of Managed Health Care.
Anthem Cites Rising Medical Costs, Low Profits
In the rate request, Anthem said certain medical costs have increased by nearly 11%, while the price that the insurer actually pays is rising by 13.5% after adjusting for customer deductibles.
According to Anthem, the profit margin on its individual insurance plans in California is less than 1% this year. The insurer said it expects to lose money in the individual market in 2013 even with the proposed increases.
Darrel Ng -- Anthem spokesperson -- said, "We share our members' concerns over the rising cost of health care," adding that the "economic downturn continues to lead many healthy individuals to avoid purchasing coverage or to drop coverage altogether, leaving an insured pool that utilizes significantly more services."
Reaction to Proposed Rate Hikes
California Insurance Commissioner Dave Jones (D) said that the state will thoroughly review the proposed rate increases to assess whether they are warranted.
He said, "It's fair to say policyholders are dismayed time and time again at these rate increases they are forced to pay."Although state officials can review the proposed premium hikes, they do not have the authority to reject them (Terhune, Los Angeles Times, 11/28). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.