Advertisement
YOU ARE HERE: LAT HomeCollections

Anthem Blue Cross extends delay on premium increase

The insurer had postponed its planned hike for two months amid public outcry, and a spokeswoman says there won’t be an increase in May.

April 23, 2010|By Duke Helfand, Los Angeles Times

Thousands of Anthem Blue Cross policyholders who faced steep rate hikes on May 1 will get at least a temporary reprieve after California's largest for-profit health insurer extended a two-month postponement prompted by public outrage over the proposed increases.

But there was no word from the insurance company on how long this new delay will be.

Anxious customers have been waiting to hear from the Woodland Hills company about a jump in their premiums of as much as 39%. A spokeswoman for Anthem's parent, WellPoint Inc., said this week that the insurer's 800,000 California members who buy individual policies will see no difference in their bills at this point.

"They should not experience a rate change beginning May 1," said Kristin Binns. "Members will receive adequate notification of any rate change. Until they receive information indicating otherwise, rates remain unchanged."

State law requires insurers to give policyholders at least 30 days' notice before altering rates, meaning Anthem could not impose higher premiums until the end of the May at the earliest.

Steve Shubitz, a healthcare analyst with Edward Jones in St. Lewis, predicted Anthem would eventually raise premiums to make up for rising medical costs and the losses it's incurring on policies sold to individuals. "The rate is certainly going up; its just a matter of how much," Shubitz said.

But Anthem isn't likely to make a move on rates until an outside actuary, appointed by California's insurance commissioner, issues a report on the insurer's spending practices, analysts said.

The actuary, Axene Health Partners, will determine whether Anthem meets a state requirement to spend at least 70% of premiums on medical claims.

In the meantime, Anthem customers welcomed the new delay.

"The people have won one here," said Doug Rosen, 60, whose individual premium was set to rise 27%.

The Calabasas resident said he did not object to rates going up with inflation, perhaps 3% to 5%. "If they want a rate increase," he said, "let them have one that is reasonable."

In January, Anthem notified many individual policyholders that their rates would rise March 1. After a vocal public backlash, however, the first delay was announced. Anthem and state Insurance Commissioner Steve Poizner — who is in a tough race to be the Republican candidate for governor — have both said that they wanted to see the Axene report, due any day, before deciding whether the rate hikes will go forward.

"We are still awaiting results from the third-party review to determine next steps," Binns said.

duke.helfand@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|