Poizner investigates Anthem Blue Cross rate hike

February 10, 2010 7:47:10 PM PST
The state's insurance commissioner is investigating whether one of California's largest for-profit health insurance providers is gouging customers. Congress has already called for hearings regarding Anthem Blue Cross, but the state has little control over the premiums.

The state may not have the power to control rates, but it can conduct audits. California Insurance Commissioner (and Republican gubernatorial candidate) Steve Poizner has fired off a letter to Anthem Blue Cross asking that the increases be postponed until may while the state investigates.

Talk about sticker shock -- Pamela Fasick recently received a letter from Anthem Blue Cross indicating her monthly premium is skyrocketing from $584 a month to $748 starting March 1.

"It's a $194 increase a month, which is a 28 percent increase and that's a fairly large amount of money; I certainly hadn't planned for anything like that," she said.

Fasick, a self-employed attorney, is one of approximately 800,000 Californians who buy individual policies through Anthem Blue Cross and now face monthly hikes as high as 39 percent.

Poizner says he is stunned by the magnitude of the increases and is investigating.

"They set the prices the way they want, we don't approve their prices or control them, but California law allows me, once they make a price change, to then go back and look at whether the price change was justified," he said.

Under California law, Anthem Blue Cross and other providers who jack up their rates are required to spend 70 cents of every dollar on actual health care costs.

"If they don't comply, then of course, ultimately, we have the power to take away their license to do business in the state of California," Poizner said.

Anthem Blue Cross sent ABC7 a statement saying, "We regret the impact this has on our members. It highlights why we need sustainable health care reform."

The most vocal proponent of health care reform, President Barack Obama, is using Anthem Blue Cross as the poster child for the need for change.

"If we don't act, this is just a preview of coming attractions," he said.

Fasick now plans to pay a higher deductible for a monthly rate she can afford.

"I really don't want to give up my health insurance, especially as you get to be middle age, not that I like to think of myself that way," Fasick said.

Poizner says those being hit with high rates should shop around; there are 70 health care providers in California.

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