California’s Largest Health Insurer Defends Premium Increases of Up to 39 Percent

(From ABC News…In case you missed this story!)

The Obama administration is demanding answers from California’s largest insurance firm, Anthem Blue Cross, about why the company is suddenly raising premiums on some customers by up to 39 percent; more than 10 times the rate of inflation.

Nearly a million Californians with individual insurance plans have received letters from the company notifying them of the rate hike, which, some customers said, makes their insurance unaffordable.

“I really can’t afford to spend $9,000 a year on health insurance,” San Francisco attorney Pamela Fasick said of her policy premiums scheduled to increase 28 percent March 1.

“I would hate to give up insurance at this point in my life, but I wouldn’t be able to pay that money out of my income without going into debt,” she said.

Health and Human Services Secretary Kathleen Sebelius has insisted that the company justify the rate increase in detail to her agency. “We need to make sure that companies are spending their money on health claims, not on overhead costs,” she said.

Anthem Blue Cross’s parent company, Wellpoint Inc., earned a record $2.7 billion in profits for the last quarter of 2009. Its quarterly sales grew to $19 billion, up 26 percent from $15.1 billion in the comparable 2008 period, Sebelius pointed out.

The U.S. Health and Human Services Department and the California are investigating the rate increase, although their ability to reverse the company’s decision is unclear.

In a statement, Anthem Blue Cross attributed the increased premiums to a bad economy and rising health care costs, forcing members to drop coverage, which “leaves fewer people, often with significantly greater medical needs, in the insured pool.”

“People are scared to death,” said Rep. John Garamendi, D-Calif. “They’re losing their jobs, they know they’re going to lose their group plans. … they’re nervous and they’re upset.”

The news comes on the heels of a new government estimate that health care consumed a record 17.3 percent of all spending in the U.S. economy last year.

It’s also not clear whether customers in other states are being affected. Employer-based insurance and group policies will likely see 10 to 20 percent increases in the next year, said health industry consultant Robert Laszewski.

Indianapolis-based WellPoint is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.

And you still can’t have your doctor or  specialist in the HMO! No wonder why they’re lobbying to defeat Universal Health Care? They have 19 billion reasons why! And now we learn that in principle, WE DID HAVE ONLY ONE INSURER!