ANTHEM BACKS DOWN / Anthem Blue Cross of California withdrew its proposal to raise premiums for individual policyholders by up to 39%.
Anthem Blue Cross of California withdrew a proposal to raise premium rates up to 39% on individual policyholders. The WellPoint subsidiary submitted to the California Insurance Department last November its intent to raise rates on 800,000 California members by an average of 25% and up to 39% starting in March. The rate increase drew fire from the Obama administration and spurred congressional hearings in February. Anthem Blue Cross suspended the rate increase until May while an independent actuary conducted a review of the rate application. The actuarial firm, Axene Health Partners, found five errors in the insurer’s rate application, including inaccurate trend information for forecasting future medical costs, according to a summary released by the state. California Insurance Commissioner Steve Poizner called the errors “substantial.” Anthem Blue Cross of California will re-file its rate application this month. The Woodland Hills-based insurer said in a statement that a requirement in the new health reform law effective January 2011 that insurers spend at least 80% of premium dollars on medical care also spurred the decision. Meanwhile, the industry moved to stop rescissions of patient coverage (See story, p. 8).