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Blue Cross to delay insurance rate hike amid criticism

February 13, 2010 | 2:29 p.m.

Health insurer Anthem Blue Cross said Saturday it would postpone its much-criticized plan to raise rates up to 39 percent for some California residents, agreeing to let regulators first review the decision.

The rate increases will be delayed two months as requested by the California Department of Insurance, said Brian Sassi, president of Anthem Blue Cross of California in Thousand Oaks.

The company said it welcomed a review by the department, and that its proposed rates reflect anticipated medical costs.

"Anthem filed these rates with the appropriate regulators in November of 2009," Sassi said. "They are actuarially sound and in full compliance with all requirements in the law. The rate adjustments have been reviewed by an independent expert."

Anthem, a subsidiary of WellPoint Inc., has been under fire for a week from regulators and politicians for notifying some of its 800,000 individual policyholders in California that it plans to raise rates by up to 39 percent March 1.

WellPoint blamed the recession and rising medical costs for the increase, but Health and Human Services Secretary Kathleen Sebelius said Thursday "it remains difficult to understand" how premium increases of that size can be justified when WellPoint Inc. reported a $4.75 billion profit in the last quarter of 2009.

She also noted that the premium increases are 10 times higher than the increase in national health care costs. (Emphasis added)

Anthem's plan comes as more people lose employer-sponsored health insurance. A congressional committee will hold a hearing on the rate hike on Feb. 24. (Emphasis added)

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