The response from state and federal regulators was swift and heartening. California Insurance Commissioner Steve Poizner, who can't regulate rates directly but can limit insurers' profit margins, announced that he was hiring an independent actuary to scrutinize the planned increase. The House Energy and Commerce Committee and Health and Human Services Secretary Kathleen Sebelius also launched inquiries. To truly protect consumers, though, Congress should pass a healthcare reform bill that makes it easier for people to switch insurers without sacrificing coverage.
Anthem's official explanation for the hikes is that rapid increases in the cost of treatments and greater demand for healthcare services are driving up expenses at an "unprecedented" rate. It also asserts that the recession has prompted many healthy people to give up their insurance, leaving fewer policyholders to cover the cost of caring for a sicklier group. Those are valid complaints, but they don't automatically justify jacking rates up to the roof. In fact, Anthem's rate increases are contributing to the problem by pricing younger, healthier people out of the market for individual policies.