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Officials ask Anthem to justify rate hike in Calif
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Officials ask Anthem to justify rate hike in Calif
By SHAYA TAYEFE MOHAJER,Associated Press Writer -
Wednesday, February 10
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LOS ANGELES – Over the past 12 years, Josh Libresco's health insurance premium has increased almost eight-fold for his family of four.
The 54-year-old San Rafael resident is facing a 39 percent rate hike from Anthem Blue Cross on March 1 that will raise his premium from $858 to $1,192 a month. In 1998, his monthly premium was $151.
Libresco was one of a number of Anthem policyholders who received a letter last week saying California's largest for-profit health insurer plans to hike premiums on individual policies by as much as 39 percent.
Anthem has declined to say how many of its 800,000 individual policyholders in California are being affected by the hike. But Health and Human Services Secretary Kathleen Sebelius demanded specifics in a sternly-worded letter Monday, saying the insurer has "a responsibility to provide a detailed justification for these rate increases."
On Sunday night, President Barack Obama criticized the Anthem rate hike in a CBS News interview, saying employer and group policies can expect to see premiums rise if his health overhaul doesn't move through Congress where it has stalled.
In a statement, Anthem Blue Cross of California blamed the weak economy and rising health care costs for its rate hike, while pledging to reply to Sebelius' query promptly.
Health insurance analysts agreed that the rise in individual premiums will be echoed on a smaller scale in the rest of the marketplace. Employer-based insurance and group policies will likely see 10 to 20 percent increases in the next year, said health industry consultant Robert Laszewski.
About 13 million Americans purchased health insurance through the individual market in 2008, the most recent data available. Surges in their premiums can be explained by competing interests: Insurance companies are working to maintain earnings expectations in the face of rising costs, while rising premiums are driving healthy people to drop coverage, Laszewski said.
Various insurers have mandated rate hikes on individual policies across the country in recent years, though California's increase is larger than most. Last month, Anthem Blue Cross and Blue Shield filed for a 23 percent rate hike on 11,066 individual policies in Maine. In November, Oregonians holding individual policies with Health Net Health Plan of Oregon faced a 22.8 percent hike.
In a rare move, California Insurance Commissioner Steve Poizner is hiring an outside actuary to determine whether Anthem is abiding by state regulations and spending at least 70 percent of premium dollars on medical care as opposed to administrative costs.
Poizner's spokesman, Darrel Ng, said that's the only recourse because rate hikes do not need to be approved by the state.
After recieving numerous complaints from "irate Californians," Poizner asked the insurer in a letter Monday to delay implementing the rate hike for two months, until the actuary completes his review.
Anthem officials had no comment, saying the letter was being reviewed Monday.
The Los Angeles Times reported the California rate hikes last week. Anthem notified customers that rates would go up beginning March 1 and might start increasing more frequently than the usual annual increases. The increases ranged from 30 percent to 39 (AP) _ percent.
The company has declined to provide details on the rate increases, such as how many people would be affected or how much the new rates would be. It's also not clear whether customers in other states are being affected.
Indianapolis-based WellPoint is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.
___
Associated Press writers Erica Werner in Washington and Tom Murphy in Indianapolis contributed to this report.
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