California insurance regulators asked Anthem Blue Cross to delay controversial rate increases of as much as 39% for individual policies, hikes that have triggered widespread criticism from subscribers and brokers -- and now from the federal government.There is a reason. There is a similar situation in the energy industry, where gas and electric rates increased due to customers going green and closed down manufacturing plants due to the recession, all of which were cutting into profits:
In a rare step, the Obama administration called on California's largest for-profit insurer to justify its rate hikes … California Insurance Commissioner Steve Poizner said to WellPoint's chief executive and chairman that he would stop Anthem's rate increases if the actuary determines that the insurer spends less than 70% of its premiums on benefits, as required by state law.
Anthem said its costs have been driven up in part because the weak economy has led many people in good health to forgo coverage, leaving those with greater medical needs in its pool of customers. "We regret the impact this has on our members," it said of its rate hikes.Subtle message: Mandated health care for everyone, which I support, but for reasons that would cut down on premiums and create larger buying pools.
Health and Human Services Secretary Kathleen Sebelius said Anthem's "strong financial position" made the increases "even more difficult to understand." She cited recent profit reported by its parent, WellPoint … an eightfold increase in profit for the last three months of 2009. That's $2.7 billion.Wow, tea partiers sure had a handle on the issue of health care, didn't they?