The health care changes due to arrive have kept companies like Anthem Blue Cross and its parent company, Wellpoint (located in Indianapolis) in the spotlight – and the glare isn’t likely to fade soon. Even before the health care legislation was proposed, the Consumer Watchdog group was challenging potential double-digit health insurance rate increases (for customers buying individual health insurance policies), according to information found in the Los Angeles Times.
California Insurance Commissioner Steve Poizner has been asked to conduct an inquiry into proposed insurance rate hikes. Anthem’s rate hikes have gone up by 39 percent for individual policyholders in California, affecting approximately 800,000 people. When basic health insurance rises 39 percent per year, it can become unaffordable for people struggling in an already tough economy. Many people would cut items from their budget if they went up that much, but health insurance is not usually considered a discretionary item. It is a necessity to keep sick people from facing the burden of paying high medical costs without help. Now Anthem is being asked to justify the rising health insurance costs.
Proposed Raises by Anthem Affect Entire Nation, even after Health Care Debate
It isn’t just California citizens who are affected by soaring health insurance premiums. Premiums are slated to go up as much as 20 percent or more in Connecticut, Maine and Oregon. Live in Michigan? Insurance premiums have been rising as much as 56 percent. Clearly, this isn’t a reasonable or workable amount for many people’s budgets.
It certainly wouldn’t be for us. But we’ve been lucky. Although we had Anthem insurance, we always had a company match and rates were kept low. It appears that individual health insurance policyholders aren’t so lucky. How quickly can proposed health care legislation keep insurers from raising rates to staggering levels? It appears that insurers have tried to raise rates in anticipation of the proposed changes.
Anthem controls a majority of for profit insurance plans in many cities. They could raise insurance rates to high levels because they were free of antitrust laws. But the recent vote aims to eliminate the insurance industry’s antitrust exemptions.
Anthem’s Indianapolis Based Parent Company, Wellpoint, is also Target of Health Insurance Inquiry
Indianapolis-based Wellpoint is being accused of inflating rates as well, especially since the parent company has close ties to Anthem. Democrats have noted that Wellpoint and Anthem offer huge salaries and perks for top employees and executives while “padding” premiums for individual policyholders. One reason for the health insurance increases? Anticipated changes from healthcare reform. Now that reform has indeed come to pass.
Wellpoint and Anthem executives have tried to justify raising rates because of losses suffered during the recent recession. True, Baby Boomers are reaching ages where they may be getting older and sicker while younger and potentially healthier individuals try to keep their budgets in line by going without health insurance. But this is a risky move for the younger generation. Even if the odds are low, one illness can cause long lasting debt. (I have some personal knowledge of this, as an adult son, young and previously healthy, tried to skimp on health insurance, got sick and is still paying money towards those bills).
Although Wellpoint has denied making money from individual health insurance claims, America’s five largest health insurers earned profits of over $12 billion last year, according to research from Health Care for America Now. Compare that to 2008 and the result is a 58 percent increase in profits. Insurance companies aren’t making money? Hard to believe.
Not surprisingly, because it is based in Indianapolis, Wellpoint (with the Anthem label) controls 60 percent of the market in the city. It runs plans in many other states where it has the majority of privately owned insurance plans, including Maine (78 percent) and Missouri (68 percent). The newest legislation may change all of this, including huge benefits to insurance company executives – even as private health insurance policyholders struggle to deal with rising insurance rates. Wellpoint is among the five largest for profit health insurers in the country and Anthem is one of its insurance companies.
Indianapolis citizens employed by Wellpoint wonder if cost-cutting measures will mean that many jobs will be cut. That would indeed affect the unemployment rate in Indianapolis. But there is so much at stake here, not only for those employed by Wellpoint but for the entire country and for health insurance rates which are affordable.
Potential Help on the Horizon
The latest possible help for the uninsured, those who can’t afford insurance and those who don’t get it in order to try and make ends meet seems to be in the works. The House has voted to end the health insurance company’s antitrust exemption. Now maybe they’ll be more accountable to the American public and less open to raising insurance rates so quickly.
Group Seeks Documents from Anthem Blue Cross Inquiry, March 19, Los Angeles Times, here
Bust the Health Insurance Trusts, NY Times, February 23, 2010 here
Lawmakers Accuse Wellpoint, Parent Company of Anthem Blue Cross, of Profiteering, Feb.25, 2010, Los Angeles Times
Report: Insurers Enjoy Record Breaking Profits as They Cut 2.7 Million People from Their Rolls, Feb 11, 2010, Health Care For America Now here