Hearing on Blue Anthem premium hikes

February 23, 2010 12:00:00 AM PST
Executives from Anthem Blue Cross had some explaining to do this afternoon in Sacramento on Tuesday afternoon as they faced the Assembly Health Committee in Sacramento and things got testy.

"Have you no shame?" asked Dave Jones, the Sacramento Democrat who chairs the Assembly Health Committee. Jones was quizzing two executives of Anthem Blue Cross, the company that plans to raise rates for its individual policy holders in California by as much as 39 percent.

"The question is disappointing to me Mr. Chairman," responded a shaken Leslie Margolin, the president of Anthem Blue Cross in California. "It is disappointing to me."

Nonetheless, Anthem executive told the committee, despite scathing criticism from lawmakers and consumer groups, they will go ahead with the increases. "We advocate appropriate rates," said Jim Oatman, a Vice-President with Anthem's parent company Wellpoint, which recorded profits in excess of $3 billion in 2009.

According to Anthem, the rate increases are necessary due to losses in their individual business in California and increasing costs, due to a pool of policy holders that is aging and more unhealthy than in past years.

Jones wants to introduce legislation that would require health insurance companies to get prior approval for rate increases in California, similar to existing regulations for the car and home insurance industries.

"There's no reason we shouldn't extend that to our health. After all, isn't our health every bit as important as our cars," he said.

In the meantime, anthem policy holder Laurel Kaufer's premiums are set to go up 34 percent, to $1,100 per month.

"Nobody should ever have to weigh the need for health care versus the cost of health care," she said.

The rate increases were originally set to go into effect on March 1, but Anthem agreed to delay them until May 1 at the request of State Insurance Commissioner Steve Poizner.

Anthem gave no indication that the affected group will get a reprieve beyond that.