California News

Anthem insurance customers see big rate hike

Friday, February 01, 2013

A big rate hike took effect Friday for nearly three quarters of a million Californians with Anthem Blue Cross health insurance. A ballot measure would give the state more power to regulate health insurance rates.

Tama Greenberg was dreading the start of February, when her health insurance premium with Anthem Blue Cross would skyrocket from $635 a month to nearly $800.

"I'm mad about it because I feel they're trying to take advantage of things before the 'Obamacare' takes effect, that they're trying to get their increases in," said Greenberg.

There were 730,000 Californians who buy private insurance on the individual market through Anthem who saw an average 17.5-percent increase. But some are getting hit with as much as a 26-percent jump.

Consumer Watchdog says this is third or fourth rate hike in two years from an insurer whose parent company made $2.7 billion in profits last year.

Anthem says the industry had to raise rates. It's not the only one.

"Unfortunately due to increasing medical costs and due to a pool of people which is generally older and sicker than they were last year, we have to raise rates to cover our costs," said Darrel Ng, Anthem Blue Cross.

In fact, even with the rate hike, Anthem says it's taking a 2.5-percent loss on this group of consumers.

Consumer groups, though, point out the Standard and Poor's Healthcare Economic Indices found the rate of inflation in the industry slowed to 5 percent last year, questioning the need for double-digit increases.

"I think what Anthem Blue Cross has just done is a perfect example of why we need to have rate regulation in California," said Richard Holober, executive director, Consumer Federation of California.

Fifteen states, including California, have no authority to control rates. An initiative is already in the works to give the state's insurance commissioner the power to reject rate hikes.

Tama Greenberg just wants to hang on until 2014 when the federal Affordable Care Act takes effect and people can buy health insurance on a competitive online exchange.

"Hopefully it will lower the rates because the quantity of people being covered should increase the revenue to the insurance companies and they should lower the rates," said Greenberg.

Anthem Blue Cross says that in a way, prices will be regulated under the federal healthcare reform act, where insurers must spend 80 to 85 cents of every premium dollar on care.

(Copyright ©2014 KABC-TV/DT. All Rights Reserved.)

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