WellPoint Responds to Criticisms of Anthem Blue Cross Rate Hikes
On Thursday, Anthem Blue Cross of California's parent company WellPoint sent a letter to HHS Secretary Kathleen Sebelius defending Anthem's scheduled rate increases for individual policyholders, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 2/12).
Anthem recently informed many of its approximately 800,000 individual policyholders that premiums would increase by as much as 39% starting on March 1 (Murphy/Alonzo-Zaldivar, AP/Ventura County Star, 2/12). The insurer also informed members that it might start adjusting premiums more often than once a year (California Healthline, 2/10).
In the letter, WellPoint said it opted to raise rates because:
- Deductibles and co-payments have not increased along with inflation;
- Many policyholders are moving into higher age categories that call for higher premiums;
- Medical care costs are continuing to climb; and
- More healthy consumers are dropping coverage to save money, thus creating an enrollment pool of people with greater health needs (AP/Atlanta Journal Constitution, 2/11).
WellPoint said less than 25% of affected Anthem beneficiaries will experience the alleged rate increases of 35% to 39%. Executives said the average increase will be about 25%, while some policyholders will see rates fall (Helfand, Los Angeles Times, 2/12).
WellPoint also noted that its prices and profits are similar to that of its competitors (Seelye, New York Times, 2/12).
Officials, Lawmakers React
Sebelius responded to WellPoint's letter by questioning the insurer's explanation. She said that "it remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify massive increases that will leave consumers with nothing but bad options."
She added that the increases likely will force some members to cut back on health benefits or drop coverage entirely (Reichard, CQ HealthBeat, 2/11).
Senate Majority Leader Harry Reid (D-Nev.) on Thursday commented on insurers' "greed" and "reckless decisions" without naming Anthem specifically.Reid also said Anthem's rate increases and its decisions to adjust premiums more than once annually could negatively affect consumers and the economy (Los Angeles Times, 2/12). 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.