Washington, DC: The much-maligned WellPoint /Anthem Blue Cross rate increases, scheduled to take effect today in California and other states, have been delayed until May 1, giving congressional leaders some time to investigate the reasons behind the new rates, which are projected to cost health insurance plan holders as much as 39 percent more.
WellPoint CEO Angela Braly assured a congressional subcommittee last week that "we care deeply about our California customers," but that the rate increases were necessary for several reasons: an aging population, increasing costs of diagnostic testing, and a shrinking insurance pool due to rising unemployment.
WellPoint lost 1.4 million subscribers, or four percent of its subscriber pool, in 2009.
Columnist Michael Hiltzik wrote in the 2/28/10 edition of the Los Angeles Times that the proposed WellPoint rate increase, together with Braly's testimony and other statements made by WellPoint executives in recent days, signals that insurers are unable to profitably manage their business through periods of high unemployment.
Critics of WellPoint decried the increase in view of the insurer's recent profits. US Senator Jeanne Shaheen (D-Madbury) asked WellPoint to justify rate increases in the neighborhood of 13 percent in New Hampshire and 24 percent in Maine. "It's hard to justify those kind of rate increases when the company's profits increased ... almost $5 billion in 2009," she said in an interview with Foster's Daily Democrat on 2/25/10.
Critics also cite the $2.6 billion the company spent re-purchasing WellPoint shares in 2009. The company reportedly authorized a further expenditure of $3.5 billion to re-purchase WellPoint shares.
Prior to announcing rate increases, WellPoint had taken steps to raise the average deductable—the amount individuals or families have to pay out-of-pocket before their policy kicks in to underwrite costs. Over the past two years, Hiltzik reveals, the average deductable has risen 20 percent. Hiltzik refers to one WellPoint policy for family coverage in the state of California that carries a deductible totaling up to $40,000.
Hiltzik challenged Angela Braly's claimed that even with the latest California rate increases, "a 40-year-old woman in Los Angeles can obtain coverage with a $1,500 deductible for as low as $156 per month."
Assuming a 40-year-old woman with no pre-existing conditions, a consumer buying the CoreGuard package from WellPoint/Anthem Blue Cross for California would still be required to pay 70 percent of the cost of covered services, including routine mammograms and Pap tests. There are no maternity benefits. The policyholder would also be facing as much as $500 a day for hospital stays.
That doesn't factor in the $1500 deductable.
This appears to be the status quo at current rates. WellPoint, as of May 1, is going to require California policyholders to pay up to 39 percent more in premiums to maintain coverage as is.
If you have suffered losses in this case, please send your complaint to a lawyer who will review your possible [INSURANCE Lawsuit] at no cost or obligation.
LawyersandSettlements.com - A trusted, independent legal news provider bringing quality news and information on all legal cases and lawsuits filed in United States of America to its readers since 2002. Over 250,000 legal help requests including Insurance Cases have been forwarded to lawyers all across to the country.
Email
WellPoint CEO Angela Braly assured a congressional subcommittee last week that "we care deeply about our California customers," but that the rate increases were necessary for several reasons: an aging population, increasing costs of diagnostic testing, and a shrinking insurance pool due to rising unemployment.
