California's health care problems continue to plague them. The latest involves the leading health insurance provider Anthem Blue Cross of California who threatening as much as 39% premium hikes on individual policies. This premium increase is drawing the ire of many including the White House. Politicians in California and the White House are calling on Anthem Blue Cross to justify their actions. Now the government wants to know why the increase in premiums.
Anthem Blue Cross of California announced the decision to increase premiums on Monday. The state Department of Insurance however demanded that the company delay their efforts until May 1 allowing the state more time to investigate. Anthem Blue Cross has yet to provide a clear reason why the extraordinary premium increases are occurring.
What is known, however, is that Anthem’s 800,000 individual policyholders are liable to be affected by the changes. The unofficial company response points to rising medical costs and the cost of losing many policyholders due to the recession. Some speculate that Anthem’s motives may be a bit more disingenuous, that is to say, motivated entirely by profit margins and the looming healthcare reform act.
Should Obama’s health care overhaul go through, Anthem Blue Cross would face potential profit loss, a huge rise in customers who pay little but require more care, as well as an overall strain on company resources. The move, though unusual, is seen as a preemptive measure.
The increase in premiums is not something new. Anthem Blue Cross of California members have already experienced many premium hikes along the years. In California, insurance providers are free to increase their rates whenever and by how much they want. The new proposed increased in premiums could mean that customers could be paying over $9,000 a year simply on health insurance.
Anthem’s parent company, Wellpoint Inc. based in Indianapolis, is not by any means in the hole itself. In fact, earnings were strong - the company announced just last month that its earnings had increased eight times in the last three months of 2009 alone. This, of course, begs the question: what’s really behind the premium increases?
If so many healthy people have quite Anthem Blue Cross’ coverage altogether leaving an inordinately large number of sick people in the pool, than is the 39% a justifiable number to cover those costs? For now, the question remains unanswered. Luckily for members, they will not have to pay out until a later date.
Anthem Blue Cross of California’s premium increases have revived Obama’s flailing health insurance reform bill. The proposed overhaul has so far been stalled by Republican maneuvering and bipartisan bickering. This new issue, however, highlights the exact change that is needed. With health insurance premiums so high, many Americans can no longer afford to keep themselves insured. If health care reform passes, insurance providers will lose profits, but more Americans will be insured than ever before.
Written by Lani Shadduck
HULIQ.com
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