Anthem postpones controversial rate hike

After pressure from several members of Congress, the Obama administration and the media, Anthem Blue Cross says it will postpone a controversial insurance rate increase [1] until May 1, reports the Associated Press. 

That gives California's insurance commissioner, Steve Poizner, more time to review whether the sizable increase complies with state law. California insurers are required to spend 70 cents of every premium dollar on medical care. Anthem's increases, originally planned to kick in March 1, would affect 700,000 Californians who purchase their own insurance, increasing their costs by an average of 25 percent--and up to 39 percent for some consumers.

"Medical cost inflation in California is in the 10 to 15 percent range, so I have a healthy skepticism how they can get to 39 percent," said Poizner. He threatened to strip the company of its license to sell insurance if it fails to meet the 70-cent requirement while charging higher prices. HHS Secretary Kathleen Sebelius has also called Anthem's increases into question.

Dave Jones--a Democrat in the California State Assembly--wrote in the San Francisco Chronicle that he is going to reintroduce a "rate regulation" bill known as Proposition 103. Jones hopes the plan--which already requires auto, property and casualty insurance providers to obtain prior approval before increasing rates--will force health insurers to do the same.

To learn more:
- read this Associated Press article [2]
- here's Jones's submission [3] to the San Francisco Chronicle
- check out this fact sheet [4] on Prop 103

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Sebelius demands Anthem explain its 'extraordinary' premium hikes [1]
Furor, demand for answers, spreads over rising healthcare premiums [6]
Study: Health insurance premiums rising faster than wages [7]