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Californians with individual health-insurance policies from Anthem Blue Cross must have breathed a collective sigh of relief on Feb. 13. Under heavy pressure from the state insurance commissioner and the Obama Administration, the company announced that it would delay a set of dramatic rate hikes. In the meantime, at the request of the commissioner, independent actuaries will review the company's books and investigate whether one-year premium increases of up to 39% are legal and justifiable. Surely they can't be, right...
Well, actually, rate hikes from Anthem Blue Cross, a for-profit company, will probably still happen, according to actuaries and other experts with extensive knowledge of the individual health insurance market, in which the company operates. The best that Anthem Blue Cross customers in California can probably hope for, say these experts, is that the rate hikes will be less dramatic than what the company first proposed. (See "What Health Care Reform Really Means...
Bolstering the argument that Anthem Blue Cross will likely be able to proceed with its massive rate hikes is the fact that these kinds of increases are nothing new. The company made news for similar double-digit spikes in 2005, for example, and a recent study found that average individual insurance premiums in California increased 23% between 2002 and 2006, even as the actuarial value of these plans dropped considerably. (This means consumers are paying more for less coverage than before...
Regardless of what actually happens with Anthem Blue Cross's rate increases, the news has served as a useful tool for an Administration now making perhaps its hardest and last push for federal health care reform. After the Los Angeles Times broke the Anthem Blue Cross story, Health and Human Services Secretary Kathleen Sebelius lambasted the company. First she publicly asked it to justify the increases, and when the company offered a five-page explanation, she responded by saying, "It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify...
Sebelius also released a report Thursday on proposed rate increases in six other states. And three days after launching his new Twitter feed, White House press secretary Robert Gibbs used the tool to link to news coverage about the Anthem Blue Cross kerfuffle. "BIG insurance rate increases and MORE coming," wrote Gibbs, who said that such increases would serve as the "backdrop" for a bipartisan health care summit scheduled for Feb. 25. There, the Democrats will argue that without a massive, federal overhaul of the health care system and insurance market, costs will continue to rise dramatically and unpredictably...