Anthem To Delay Insurance Rate Hike Amid Criticism

THOUSAND OAKS – Health insurer Anthem Blue Cross says it’s postponing its much-criticized plan to raise rates up to 39 percent for some California residents buying insurance on their own.

Anthem says it will postpone the increase by two months, as requested by the California Department of Insurance.

The company says it welcomes a review by the department, and that its proposed rates reflect anticipated medical costs.

Anthem’s plan, coming as more people lose employer-sponsored health insurance, has been criticized by regulators and politicians all week. A congressional committee will hold a hearing on the rate hike on Feb. 24. Obama administration officials have said it doesn’t seem justified, given the big profit parent company WellPoint made last year.

The government’s top health official isn’t buying a major health insurer’s explanation for double-digit premium hikes in the nation’s most populous state.

HHS Secretary Kathleen Sebelius said Thursday “it remains difficult to understand” how WellPoint can justify premium increases of as much as 39 percent for some of its customers in California. In a letter to Sebelius, WellPoint said healthy people have been dropping coverage at a time of rising medical costs, squeezing revenue to cover claims.

But Sebelius said the company made $2.7 billion in the last quarter of 2009, and the premium increases are 10 times higher than the increase in national health care costs.