Kevin Sack hits it right on the head in today’s New York Times with his story about how Anthem’s 39% premium increase in California embodies the need for health care reform, just as my colleague Dugan did last week when she talked about how Anthem had "jumped the shark."
Some of my colleagues at Consumer Watchdog spent the weekend fielding calls from legislators prepared to introduce legislation taking on Anthem over the premium increases, then the company agreed to postpone its rate hike pending review by California’s Insurance Commissioner Steve Poizner. One legislator said, "I got up at 4 AM to work on this bill," only to find that by afternoon Anthem had taken the air out of the proposal with its temporary rate freeze.
Anthem made a big mistake by exhibiting such greed after a hefty profit announcement, but the real lesson from Anthem-gate is that health reform will not go away. Even Anthem is using the rate hike as a case for reform in Sack’s article, claiming its insurance pools have shrunk too much and that’s why it needs to fill them with 39% more premium dollars. This is the same company that has been a hold out in the industry against all versions of health insurance reform, even those including mandatory purchases of its products.
The takeway from Anthem-gate is that America at least needs to force insurers to ask permission from state regulators to raise premiums before they go into effect. California has such a model for property casualty insurance and its saved Californians $62 billion on their auto insurance according to the Consumer Federation of Ameria. In fact, its the elected insurance commissioner in California, Steve Poizner, whose office was created under California’s landmark insurance reform Prop 103, who is stretching his power to review Anthem’s rates, even though Prop 103 didn’t regulate health insurance. 11 states have elected insurance commisisoners and they tend to be much tougher on insurers than appointed comishes.
How about prior approval in health insurance for America, Mr. President? Shouldn’t health insurers have to ask permission and justify their rates? When Obama starts talking about this hammer, you can bet Anthem and the rest of the insurers will feel the nail and come to the table quick because there’s nothing they fear more than having an elected official approve their premiums and profits.