Anthem Blue Cross faces class-action lawsuit as rate hike decision looms

Up to 800,000 individual policy holders with Anthem Blue Cross in California could soon learn whether the health plan will move forward with planned rate increases as high as 39 percent, reports the Los Angeles Times. Anthem had delayed the rate hikes to May 1 in order to await the outcome of a review of its spending practices by Axene Health Partners, an outside actuary appointed by California Insurance Commissioner Steve Poizner. Poizner previously has indicated that he would prevent Anthem from instituting the rate increases if Anthem spends less than 70 percent of its premiums on healthcare claims. Axene is expected to release the report within two weeks.

Despite speculation that Anthem might delay the increases by another 30 days or phase in the steepest increases over a period of months, the insurer hasn't discussed such possibilities with the commissioner, according to Anthem parent WellPoint Inc. However, WellPoint acknowledges that a May 1 rate increase is unlikely because Anthem would need more time to notify policy holders about changes.

Anthem and WellPoint defend the planned increases as "actuarially sound." However, the public isn't buying that argument, which isn't too surprising given recent news that WellPoint CEO Angela Braly's 2009 compensation package totaled $13.1 million. A California woman has filed a class-action lawsuit in San Mateo County Superior Court alleging that Anthem is using rate increases to force individual policyholders to cancel their insurance because these policies aren't profitable enough to suit the insurer, reports the San Mateo County Times. The lawsuit also requests that the court  enforce a temporary injunction to stop Anthem from instituting rate hikes after the actuary report is released. A similar lawsuit was filed in March in Ventura County Superior Court.

For more information on the rate hikes:
- read the Los Angeles Times article

To learn about the lawsuit:
- read the San Mateo County Times article