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Anthem and its parent company, Wellpoint, appear to have answered health reform advocates’ prayers this week. Just as health care reform (read: health insurance reform) was on life support, Anthem, a national health insurer, filed a request to raise health insurance premiums for some residents in California by as much as 39%. Yes, thirty-nine percent.

It didn’t take long for officials to grab hold of the bone that could once again ignite calls for reform. U.S. Health and Human Services Secretary Kathleen Sebelius, responding to the request in a letter to company officials, mentioned the company’s $2.7 billion in earnings in the fourth quarter of 2009. Not to be outdone, California Insurance Commissioner Steven Poizner, looking to score points with voters in his quest to become governor, said the company’s request could have a “devastating financial impact on hundreds of thousands of policyholders in California.”

The Anthem request – regardless of whether it is warranted – will do for health care reform what AIG has started with financial services reform. The timing of the request couldn’t be worst, unless Anthem and Wellpoint truly want health insurance reform. Why else would they announce the huge hike – there’s no other way to put it – as President Obama gets ready to meet with Republicans and Democrats to eek out what little remains possible of comprehensive health care reform.

But the 39% rate hike proposal changes the math. No matter where one falls on the spectrum of concern about health reform, a 39% rate hike request is alarming. That kind of huge increase should be prevented somehow, most would agree, and that means we are right back into a health reform debate.

In the end, the Obama Administration is going to use the 39% rate hike to push for 100% of the reforms it says are necessary to prevent these types of increases. And more people will listen now, because 39% rate increases scare even the person with the best insurance plan in the U.S.

10 Responses to “Anthem’s 39% rate hike request is gift health reform advocates needed”

1. Tony Ondrusek Says:
   February 9th, 2010 at 11:30 am

   I see this in a bit of a different tone.
   I cannot imagine why in the world Anthem would propose a rate hike like this at this time. In the midst of one of the biggest challenges ever to control of the U.S. health insurance industry. Did they say to themselves, “Hey, let’s really stick it to the citizens of California and show the Obama Administration what we really think of them?”
   Doubtful.
   Instead, what might be happening here is basic economics.
   California is one of the hardest hit states in the current recession. And also has one of the highest unemployment rates in the nation — almost 2% higher than the national average — and this doesn’t appear to be abating.
   With more people unemployed, and people making less money, fewer are opting for individual health insurance. Arguably, the more healthy, younger people will opt out, which leaves a smaller pool of people to pay for the health care of a population with higher medical care demands.
   And if California — as with other states — has simply used its federal stimulus money to keep state employees working and using their health insurance (with no increase in their premiums) while the pool of the individual market drops, who is going to pay for the care? Surely not the state or federal government! Of course, it will be individual health insurance policy owners, who are not under a contract and whose premiums can change to meet market demand.
   If Kathleen Sebelius is serious about reforming health care and keeping costs under control, she should go to her boss (President Obama) and tell him to start from scratch with health care reform, starting with bringing the actual COST of care under control, before going after insurance companies.
   If Anthem is doing this simply as a way to increase its profits, then it should be investigated, as is happening, and appropriate action taken.
   But before we start convicting the grocer for the high cost of oranges, perhaps we should investigate the cause of the frost and why the base product costs so much to begin with.
   Meaningful, strategic, segmented health care reform should begin now. This might be the impetus to start the process rolling.

2. LBR Says:
   February 9th, 2010 at 1:17 pm

   39% is nothing! My Blue Cross/Blue Shield went up 87%… Copays doubled. The deducible doubled. It’s now has a 10% copay with no out-of-pocket limit. And best yet. You can only be hospitalized twice in a year. If you need a third or more than you get to pay 100%. This is pay-back for Obama-care not passing! Our local BC/BS had record-profits last year.
   How they get away with being a “non-profit” is beyond me. But every election they give millions to their “people” so change only occurs that brings them more money. Last week they announced that they were taking the majority of local jobs overseas to save more money.

3. Melissa Says:
   February 9th, 2010 at 1:47 pm

   LBR: They’re not non-profit. Your skepticism was quite accurate, they are a for-profit entity

4. Bebe99 Says:
   February 9th, 2010 at 4:51 pm

   My BCBS will go up 46%. It’s a high deductible plan that now costs twice my house payment. I am probably going to cancel and take my chances. Canada is now being innundated with Americans trying to move there for health insurance. And they’re not taking them! Single Payer is coming. Soon there won’t be any choice for the non-wealthy. A few years down the road and Republicans will come out looking really bad on this.

5. Marion Belle Says:
   February 9th, 2010 at 8:20 pm

   It is fantastic proof, more of it, to reignite the drive to secure Health reform by all means necessary. It is an indisputable truth that controlling and limiting the health insurance companies power, as well as there anti-heartland greed, is a win win for the economy of our country, and an investment in people’s health, and stability for the long run. Obama discreditors will be shamed as he begins to marshal the true power his administration was given by a ten million vote margin- he has three years left to govern and lead and lead, many of us believe, he has. The tea partyers, the crews who have spread lies libel and cheap slander will once again find themselves on the wrong side of history. The future is human rights for all colors sexualities and genders, equal opportunity to achieve and innovate, and longer life of
   our planet and people due to critical changes and stands that the left has stood on precedent for in our country for at least 70 years. What, I pray, have Republicans offered our nation in the way of regenerative social ideas in this time? Having been largely and vocally against civil rights reform, social security, Medicare, welfare, universal health care, equal pay, toleration in immigration law, desegregation, freedom
   of a womans’ reproductive choice, gay marriage and gays serving openly in our armed forces- as well as
   fighting consistently to defund the Arts. What they have stood for is corporate deregulation, imperial shows of power through highly controversial wars of choice, military budgets that dwarf education spending, anti-affirmative action, and in large and indiaputable part, a continued policy of white exclusionism. Make no mistake, this party has duped it’s remaining hoards, it’s new recruits, and it’s offshoot followers with sometimes effective populist cries- but what has it really done for
   you and I, except fill a void of human doubt and fear, with anger an paranoia? All the while capitalizing on the same such fears of ordinary Americans

6. jony appleseed Says:
   February 9th, 2010 at 10:50 pm

   they should give me that money and let me invest it in my penny flattenin buiseness

7. vince phillips Says:
   February 10th, 2010 at 4:39 am

   While the Anthem price hike gives rise to renewed calls for Obamacare, it should also strike fear into those supporting a state regulatory system since California had to approve the price increase. That they did so means it was justified actuarially (since CA is not one to simply acquiesce to insurer requests). The fear should come when the federal government becomes the de facto regulator of insurance premiums. Does anyone seriously think that the Congress and Administration would ever allow a cost-driven price increase to take effect? No! They would rather put the insurer out of business and let the government do it all.

8. Dave Says:
   February 10th, 2010 at 11:09 am

   Marion Belle shows himself to be nothing but a parrot of George Soros and certainly hasn’t added any original thought to the discussion. Please Marion, instead of saying “it’s an indisputable fact” that an opinion is true, actually give facts that are germane to this discussion. Since you think that somehow Civil Rights have something to do with this, should I mention that the AL governor during MLK’s days was a Democrat, and that Abe Lincoln was a Republican? That has nothing to do with ANYTHING with this discussion. I suggest you take your red herring and ad hominem, and go take a class that teaches about logical fallacies, and come back to discuss the actual objective facts of the points of disagreement instead of just slinging around random propaganda.

   Today I went to the grocery store and I was mad at the store for the cost of corn, since OF COURSE it’s an “indisputable fact” that they’re the ones responsible for higher grain prices – regardless that facts say corn costs more because of the rise of use of ethanol… I know it… If we can just regulate the grocery store more and force them to sell their products at a loss, we will surely make corn less expensive. ???? This is the line of reasoning coming from those who choose to score easy votes from the simple-minded who refuse to look deeper at an issue. It’s easier to demonize and vilify one person or group of people than it is to actually employ a multi-faceted solution. It’s much easier to feel self-righteous because we can degrade others as evil, than it is to think rationally.

   I’d love to see people actually interact objectively with the ideas both Vince and Tony stated instead of continuing to feebly spew propaganda.

9. Uncle Jack Says:
   February 10th, 2010 at 6:29 pm

   Well said Dave. Marion needs to do a bit of research for herself instead of regurgitating the Democrat Socialist Party line. I smell a big rat behind the scenes here. Just what Obamacare needs, an insurance company whipping boy to point to and say . . “See, see! Look what those nasty insurance companies are doing to us. Only thing that will save us is Obamacare, NOW.” We know what AARP sold out for, wonder what Anthem was promised.

10. J.R. Says:
    February 16th, 2010 at 10:53 am

    Dave in today’s climate tne Al governor would be a Republican and Honest Abe would be a Democrat.

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