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Congress Opens Probe into Anthem Blue Cross Rate Increases – Los Angeles Times

10 Feb

Two House panels announce they are investigating the hikes, which take effect March 1. Lawmakers ask the company’s CEO to explain the reasons for the increases.

Los Angeles Times – Congress opened an investigation Tuesday into Anthem Blue Cross’ impending rate increases in California as President Obama cited the premium hikes — some as high as 39% — in his bid to pass national healthcare legislation.

The House Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations announced they were examining the increases, which are set to take effect March 1. The subcommittee has scheduled a Feb. 24 hearing in Washington, while an Assembly committee in Sacramento has set a hearing for Feb 23.

"Reports of premium increases up to 39% are deeply troubling," Rep. Henry A. Waxman (D-Beverly Hills), who chairs the energy committee, said in a statement. "At a time when millions of Americans are struggling to keep their health insurance, we need to know what possible justification there could be for increases of this magnitude."

President Obama told reporters in Washington on Tuesday that Anthem’s rate hikes highlighted the need for healthcare reform.

"If we don’t act, this is just a preview of coming attractions," Obama said. "Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger. And we have an obligation — both parties — to tackle this issue in a serious way."

The insurance industry’s Washington-based lobbying arm, America’s Health Insurance Plans, said carriers were not to blame for the swift expansion of healthcare costs. The group said the price of hospital care, prescription drugs and doctors was propelling the largest growth in healthcare spending, as a share of the nation’s total economic output, since the government began keeping track half a century ago.

The national association also said that rising premiums were driven by burgeoning numbers of uninsured who rely on expensive emergency room services and by employers that are cutting health benefits in a still-sputtering economy.

Anthem is a California-based subsidiary of the health insurance giant WellPoint, which earned $2.7 billion in the last quarter of 2009.

In a letter released Monday, Health and Human Services Secretary Kathleen Sebelius asked the company to explain the rate increase. She wrote, “These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”

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Posted by on February 10, 2010 in Health

 

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