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Anthem Blue Cross shows no fear of healthcare reform with its proposed 39 percent rate hike

by Adrienne Verrilli, published

Reforming the health insurance industry has occupied Washington lawmakers and dominated the news for a better part of a year.  Why we need reform has become all too obvious.  Forty-five thousand Americans die each year because they don’t have health insurance.  Each day, 14,000 people lose their health insurance coverage.  Insurance premiums have risen 131 percent over the past decade while the number of employers that offer health insurance to their employees has dropped to just 60 percent.   Workers have seen their contributions to their health insurance coverage increase 128 percent while their benefits have been reduced.  More than six in 10 personal bankruptcies are a result of medical costs and the vast majority of those people had health insurance.  Have a pre-existing condition?  No health insurance coverage.  Dare to get sick while insured?  Lose your health insurance coverage. 

Leading the efforts to kill reform have been the health insurance companies.  And why wouldn’t they? While Americans are dying, going bankrupt and living with untreated serious illnesses, the health insurance companies are banking billions of dollars in profits.  The Indiana-based WellPoint, Inc., California’s Anthem Blue Cross parent company, alone earned $4.5 billion in profits in 2009, up from $2.5 billion in 2008. 

However, while the health insurance reform debate is underway in Washington, it would have been prudent for the health insurance companies to keep a low profile and not call attention their business practices and profits.  Instead, here in California, Anthem Blue Cross announced that it plans to raise premium rates for individual health insurance policy holders up to 39 percent on March 1. The massive increase will affect more than 800,000 Californians who buy individual health insurance policies because they do not have health insurance through their employers.  Fortunately, the rate increases have been postponed until May 1 while the premium increases are under review by the Department of Insurance.

Since that time, Anthem Blue Cross and WellPoint have been under heavy criticism from customers, regulators, consumer advocates, federal and state lawmakers, and President Obama himself.  In fact, executives from both companies were summoned to Sacramento and Washington this week for hearings about the rate hike decision.  Yet, unrepentant about their plan, executives announced at the Congressional hearing that they plan to move forward with its scheduled rate hike on May 1.  Adding insult to injury, it was revealed at the Congressional hearing that WellPoint paid 39 of its top executives more than $1 million each and spent more than $27 million on 103 lavish executive retreats.

The announcement at the hearing that the company plans to go forward with the rate increases came just two days after of the California Insurance Commissioner Steve Poizner charged Anthem with more than 700 violations of state law over a three-year period for failing to pay medical claims and misrepresenting policy provisions to its customers.  Anthem Blue Cross faces fines of more than $7 million.

These actions reveal one of two things about Anthem, WellPoint and others – either they are exerting unbridled arrogance or they have a clear understanding that their political power in Sacramento and Washington leave little to fear from any kind of health insurance reform or increased regulation.  To make such a bold move at a time when the entire health insurance industry is under such scrutiny says to me that they understand their power and have no issue with wielding it. 

Unfortunately, it is at the expense of the health, well-being and financial security of Californians and all Americans across the nation.

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