Anthem Blue Cross Seeks to Raise Rates Up to 20%

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After taking heat for proposing to raise
insurance rates as high as 39 percent, Anthem Blue Cross proposed rates
Wednesday that would raise health premiums by an average of 14 percent
and as much as 20 percent for thousands of California consumers.

The Woodland Hills (Los Angeles County) health insurer, which had
withdrawn its previous proposal after an independent audit found errors
in its rate calculations, submitted new filings Wednesday with the state
Department of Insurance and the Department of Managed Health Care.

If there are no delays, the rates will go into effect Sept. 1, said
Kristin Binns, spokeswoman for WellPoint Inc., Anthem’s parent company.
She said the rates will affect about 600,000 California consumers, all
of whom have individual rather than group or employer policies.

In his bid to pass national health overhaul legislation, President
Obama singled out Anthem Blue Cross and its proposed 39 percent rate
increase as the poster child for bad health insurance company behavior.
The original rate increases were supposed to go into effect March 1.

"The inadvertent errors that were part of our initial filings were
unfortunate, but we owned up to that and accept our responsibility,"
Binns said. "We understand it caused confusion on behalf of our members,
and we apologize for that."

The company has instituted a more rigorous internal review of its
filings, Binns said. She said the company expects to lose $100 million
in 2010 on the individual health insurance market in California even
under the rate increases.

State Insurance Commissioner Steve Poizner said his department would
go through Anthem’s rate filings – along with those recently submitted
by Blue Shield of California and Aetna – with a "fine-tooth comb."

Blue Shield and Aetna are seeking increases of 18 percent and 19
percent, respectively. Aetna had previously withdrawn its proposal
because of mathematical errors.

Several consumer groups said the Anthem case highlights the need for
greater rate regulatory oversight.

"Examining and controlling health insurance rates needs to be the
law, not a one-time favor to consumers," said Judy Dugan, research
director of Consumer Watchdog, which is based in Santa Monica.

E-mail Victoria Colliver at [email protected]

Consumer Watchdog
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