Former Anthem Blue Cross president opposed 39 percent rate hike

The Anthem Blue Cross executive who abruptly resigned last month told the Los Angeles Times that she had strongly opposed the insurer's controversial 39 percent rate hike in California in January.

Anthem president Leslie Margolin exited around the same time as the insurer backed down under state regulatory pressure and capped rate increases at 20 percent. The Times reports, based on interviews with company insiders, industry leaders and others familiar with the situation, that Margolin was pushed out. She says she was escorted out of Anthem's Woodland Hills headquarters by security without having a chance to say farewell to her employees.

Wellpoint declined to comment on the reason for Margolin's departure but said it had nothing to do with the rate hike issue. The company has since appointed former Aetna executive Pam Kehaly as Anthem' new president and general manager, the company announced.

The Times article suggests the internal turmoil over the rate hikes. In an interview with the Times, Margolin, who headed Anthem's employer group division, said she and other insiders had opposed the large rate hikes and tried to get Anthem's parent, Indianapolis-based Wellpoint, to rescind or reduce them. Yet she had to defend the increases in front of angry California lawmakers at a February hearing. The political backlash over the proposed hikes helped the Obama administration push through health reform legislation.

In a March speech at Pepperdine University, she called Anthem's proposed hikes poorly timed and unwise, and apologized for them. The next month, the insurer withdrew them after regulators found accounting errors that would have resulted in the insurer making higher profits.

Margolin said she will now lead a California coalition called Transforming Health Care--including hospitals, doctors, health plans, and consumer advocates -- to create a virtual network to cut costs and improve quality, the Wall Street Journal reports. In an interview last year in Ability Magazine, Margolin stressed the need for providers and plans to work together to develop a common record system, Web portal, forms, and other integrated features.

For more:
- read this press release
- read the Sacramento Bee article
- check out the LA Times article
- read another piece from the LA Times
- read the Wall Street Journal article
- check out the interview with Ability Magazine

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