Congress Launches Inquiry into Anthem's Proposed Premium Hikes

Joe Cantlupe, for HealthLeaders Media , February 11, 2010

Congress is asking for Anthem Blue Cross's corporate e-mails and other internal documents and wants the top executive of Anthem's parent company, WellPoint, to testify as to why the insurer is raising individual health insurance premiums by as much as 39% in California.

WellPoint released a statement Wednesday, referring to the proposed rate hikes for the first time, saying it does "regret the impact this has on our members," but suggested they were related to increased medical costs. The company did not mention specific numbers.

"It is important to note that individual medical insurance premiums do not reflect an individual member's personal claims experience," the company said in a statement. "As medical costs increase across our member population, our member population premium increases to the membership pool is the result.''

"Unfortunately, in the weak economy, many people who do have health conditions are foregoing buying insurance," the company statement added. "This leaves fewer people, often with significantly greater medical needs, in the insured pool. We regret the impact this has on our members."

The situation involving Congress "highlights why we need sustainable healthcare reform to manage the steadily rising costs," WellPoint said in a statement.

The proposed increases in individual health insurance has set off a furor on Capitol Hill where the House Committee on Energy and Commerce and its subcommittee on oversight and investigations said they would examine the proposed rate hike increases affecting California's largest for-profit insurer. The subcommittee has scheduled a Feb. 24 hearing in Washington about the proposed increases, scheduled to take effect March 1.

Saying the proposed increases are "deeply troubling," the Energy and Commerce Committee Chairman Rep. Henry A. Waxman, D-CA, said, "We need to know what possible justification there could be for increases of this magnitude."

In California, state Assemblyman Dave Jones, D-Sacramento, chairman of the Assembly's Health Committee, announced plans to hold a Feb. 23 hearing to examine Anthem Blue Cross, based in Woodland Hills, as well as other California health insurers. The state's insurance commissioner, Steve Poizner, has said he would take "regulatory and legal action" against Anthem Blue Cross if the health insurer does not agree to delay the rate hikes.

The California officials are the latest to attack Anthem's decision. President Obama referred to it when he discussed national healthcare legislation and Health and Human Services Secretary Kathleen Sebelius sent a letter to Anthem Blue Cross, saying she wanted the company to justify the rates. "These extraordinary increases are up to 15 times faster than inflation and threaten to make healthcare unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet," Sebelius wrote to Anthem Blue Cross.

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