Californians brace for Anthem Blue Cross rate hikes

February 1, 2013 5:59:09 PM PST
If you thought your health insurance costs were high already, think again. Anthem Blue Cross Health Insurance is hitting hundreds of thousands of customers with a double digit rate increase starting Saturday

As expected, consumer advocates are outraged and customers are stuck with skyrocketing bills and shrinking benefits.

Tama Greenberg was dreading the start of February when her health insurance premium with Anthem Blue Cross would skyrocket from $635 a month to nearly $800.

"I'm mad about it because I feel they're trying to take advantage of things before Obamacare takes effect," Greenberg said. "They're trying to get their rate increases in."

730,000 Californians who buy private insurance on the individual market through Anthem saw an average 17.5 percent increase. But some are getting hit with as much as a 26 percent jump.

Consumer Watchdog says this is third or fourth rate hike in two years from an insurer whose parent company made $2.7 billion in profits last year.

Anthem says the industry had to raise rates, it's not the only one.

"Unfortunately, due to increasing medical costs and due to a pool of people which is generally older and sicker than they were last year, we have to raise our rates to cover our costs," said Darrell Ng with Anthem Blue Cross.

In fact, even with the rate hike, Anthem says it's taking a 2.5 percent loss on this group of consumers.

Consumer groups, though, point out the Standard and Poor's Healthcare Economic Indices found the rate of inflation in the industry slowed to five percent last year, questioning the need for double digit increases.

"I think what Anthem Blue Cross has just done is a perfect example of why we need to have rate regulation in California," said Richard Holober with the Consumer Federation of California.

15 states, including California, have no authority to control rates. An initiative is already in the works to give the state's Insurance Commissioner the power to reject rate hikes.

Tama Greenberg just wants to hang on until 2014 when people can buy health insurance on a competitive online exchange.

"Hopefully it will lower the rates because the quantity of people being covered should increase the revenue to the insurance companies and they should lower rates," Greenberg said.

Anthem Blue Cross says rates will be regulated under the Federal Health Care Reform Act, where insurers must spend 80 to 85 cents of every premium on care.


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