A Proposed Healthcare Rate Hike Rejected by California

Californians are safe for now from healthcare rate hikes by the state's largest for-profit healthcare carrier, Anthem Blue Cross. According to AARP's Bulletin Today, the average healthcare rate hike was 25% to California participants in Anthem's healthcare plans although some rate hikes were as much as 39%. This is a huge healthcare rate hike to families already devastated by our economic downturn.

Many Californians can barely afford their healthcare insurance premiums now, and the big healthcare insurance carrier did not seem to take that into consideration when they proposed this rate hike back in March. A 25% rate hike would mean that If you're paying $500 a month for healthcare premiums now, that would jump to $625 a month with the new increase.

After Anthem announced its planned healthcare rate hike in California, there was intense criticism by many groups such as consumers, California legislators, and politicians in Washington including President Obama. Given the current economy, this should come as no surprise to Anthem's corporate officers. Actually, what were they thinking to suggest such a huge healthcare rate hike?

This clearly brings up a very valid point: Healthcare reform and restrictions should be applied and felt by the insurance companies which have governed our doctors and hospitals for years. They are insurance companies in business to make a profit not to help patients with illnesses and diseases.

To make matters worse, this proposed healthcare rate hike by Anthem was rejected after state regulators in California determined that the big for-profit company overstated their future healthcare costs to justify this increase. Thank goodness, California state legislators were on top of things.

Consumers in California can now relax a bit as Anthem has withdrawn its request for a healthcare rate hike in that state. Surprisingly, Anthem's parent company, WellPoint has acknowledged its errors and called them "inadvertent miscalculations". The company is now saying that it will seek another healthcare rate hike in May for their individual healthcare policyholders. Details will be forthcoming, however, state legislators and policyholders should not put their guard down yet.

Wellpoint reported a 51% increase in earnings for the first quarter of this year and still complains that the withdrawal of their proposed healthcare rate hike is making matters worse for the company. The numbers sound good to most people, however, the point here is that healthcare insurance carriers need to be made more accountable for their actions in both earnings and rejected medical decisions to their paying policyholders.

According to AARP, California State Senator Dianne Feinstein (Democrat) stated, "The discovery of inflated rate increases submitted by WellPoint/Anthem Blue Cross demonstrates exactly why we need to give the secretary of Health and Human Services the authority to review rates and assure they are reasonable." Feinstein added "This underscores the great need for transparency and accountability in the insurance market."

Wellpoint/Anthem's action to propose such a high healthcare rate increase with the probability of another increase a year later, adds fuel to the healthcare reform movement. If insurance carriers are enjoying a 51% increase in earnings, and proposing an average rate hike of 25% to its policyholders, where will it end if legislators don't step in? Healthcare insurance companies are not looking out for the 'little guy', which means more accountability needs to happen to ensure proper business ethics are in place.

Although this healthcare rate hike was proposed in California and by Anthem, policyholders in every state and with any healthcare insurance carrier should take note of this incident. Anthem undoubtedly will not be the only healthcare insurance carrier that will propose a rate hike this year. Our state legislators and policyholders need to be on the alert for similar actions and rate hikes.

Source: AARP's Bulletin Today