After undergoing a tough grilling by California lawmakers this week, Wellpoint's Anthem Blue Cross says it California-based premium increases of up to 39 percent are fair and legal, and plans to make them effective May 1.
Speaking to the state assembly's health committee, Anthem president Leslie Margolin said the steep increases have less to do with her company's "reasonable" profits of 2.5 to 5 percent and more to do with the overall condition of the nation's healthcare system, reports the Los Angeles Times.
"They are appropriate profits. They are profits that we have as...a responsibility to keep a viable business surviving," she said.
Margolin and James Oatman, WellPoint's vice president and general manager of individual business, were grilled for more than two hours by several assembly members, most notably Dave Jones, a Democrat and the health committee's chair, who called the premium increases "astonishing."
"How much profit is enough? Jones asked. At one point he asked, "Have you no shame?"
Even with all of the outrage, California Department of Insurance spokesman Darrel Ng said that thus far, Anthem's rates have always been legal. The department will approve Anthem's rate increases as long as outside actuaries certify that the company spends at least 70 percent of its premiums on medical claims, as required by state law, the Times reports. If medical spending falls below that threshold, however, "We will exercise our full regulatory authority to force them to lower their rates," Ng said.
To learn more:
- read this Los Angeles Times article
- read this San Francisco Chronicle article