Anthem Blue Cross in California is a go getter. You have to wake up pretty early in the morning to get one over on them. From rescinding policies to now throwing 39% rate increases at its clients, Blue Cross has cornered the market on antagonizing its clients.
What made the meanies at Blue Cross throw a 39% rate increase at their clients? Well in light of the fact that they made close to a $3 billion dollar profit last year, it is certainly not due to cash flow issues.
One of the largest insurers in California covering nearly 800,000 Californians, Blue Cross’s rationale here can only be speculated as trying to get one final dig at their customers before health reform passes.
Then came the news that health reform wasn’t coming, and guess what? They still plowed forward with this. I personally am not licensed with them, and even if I were I would not hesitate to spout angry gesticulations in their general direction. Our health insurance brokerage is licensed however, and after reading about this increase I thought it might be good to actually price their plans to see how they compare to other California health insurance companies.
Well guess what? They were the cheapest company in California before this rate increase, and they will stilll be among the top after it. However, if they are profitable by such a high percentage why go after this increase?
They might have a point with their argument about health care costs rising, and an even better point about due to the economy many of their healthy client base has cancelled coverage as they can no longer afford it, leaving Blue Cross with a pretty unhealthy client base. Of course all carriers would also have this same condition and they did not do this.
The response from state and federal regulators was swift and heartening. California Insurance Commissioner Steve Poizner, who can’t regulate rates directly but can limit insurers’ profit margins, announced that he was hiring an independent actuary to scrutinize the planned increase. The House Energy and Commerce Committee and Health and Human Services Secretary Kathleen Sebelius also launched inquiries. To truly protect consumers, though, Congress should pass a healthcare reform bill that makes it easier for people to switch insurers without sacrificing coverage.
The company has called on Congress to start over on healthcare reform, rather than trying to improve on the bills passed by the House and Senate. In particular, Chief Executive Angela Braly of WellPoint Inc., Anthem’s parent company, recently told the Wall Street Journal that lawmakers should find more effective ways to prod healthy people to buy insurance, promote competition among healthcare providers and put the brakes on rising costs. Those are all worthy aims, and the pending healthcare bills could be improved on all three fronts.
