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Thousands of Anthem Blue Cross individual customers with older insurance policies untouched by Obamacare are getting some jarring news: Their premiums are going up as much as 25%.
These increases, 16% on average, are slated to go into effect April 1 for up to 306,000 people — unless California regulators persuade the state's largest for-profit health insurer to back down.
Amid the fury last fall over canceled health policies, consumer advocates and state officials warned people that holding onto grandfathered policies purchased before the federal healthcare law was enacted in 2010 wouldn't shield them from significant rate hikes.
Walter and Kathy Warner of Westlake Village are facing a 25% rate increase, for a total of $1,822 per month. Their premiums had already jumped 53% since 2010, not including this latest change.
"I'm fed up with this company," Walter Warner said. "This degree of increase is unjustified."
The California Department of Insurance and the state Department of Managed Health Care are reviewing Anthem's proposed increase, and they are awaiting additional information from the company. Anthem is a unit of WellPoint Inc., the nation's second-largest health insurer.
The Affordable Care Act makes it easier for people in this situation to switch coverage because insurers can no longer deny applicants on the basis of preexisting conditions or charge them more because of their medical history. But changing plans isn't an appealing option for some consumers who like the benefits they have now and worry about losing access to their doctors.
Anthem Blue Cross said its plan to raise rates reflects that escalating healthcare costs are an economic reality industrywide. The company said customers do have new options thanks to the healthcare law.
"Many of the members affected here may be eligible for federal subsidies via the Covered California exchange and may have lower premiums if they decide to switch to an Affordable Care Act-compliant policy," company spokesman Darrel Ng said.
In recent months, state regulators have criticized major insurers for overstating what they expect to pay for patients' future medical costs in order to support substantial rate increases. Overall, U.S. healthcare spending has been growing less than 4% annually in recent years — the lowest growth rates in more than 50 years.
In comments filed with regulators, the California Public Interest Research Group Education Fund questioned why Anthem was raising premiums so far in excess of medical inflation. "We are very concerned Anthem proposed a rate hike this high without adequate justification," said Emily Rusch, CALPIRG's director.
(continue reading on the Los Angeles Times website) http://www.latimes.com/business/la-fi-anthem-health-rates-20140131,0,525...
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