Anthem Blue Cross announced yesterday that it is scrapping its request for a premium rate hike. The Obama administration, which had used Anthem’s proposed hike of up to 39% to illustrate the evils of the insurance industry, celebrated the announcement — and took some of the credit.
“Today’s announcement is good news for the more than 800,000 Californians who could have been hit with massive rate increases and gives them some much-needed temporary relief,” Health and Human Services Secretary Kathleen Sebelius said in a statement yesterday. “This result was achieved because those who oversee the insurance industry on the state and federal levels heard these voices, held investigations, and demanded action.”
She also tied it to the health care reform law.
“The Affordable Care Act will ensure that people across this country have access to the affordable, quality care they deserve. As we implement this law, our Department, and especially our new Office of Consumer Information and Insurance Oversight, will closely monitor the industry, and we will not hesitate to act to prevent exorbitant premium hikes,” Sebelius said.
Anthem will issue a new request for a rate increase “likely sometime in May,” the company said in a press release. They did not say how much the increase will be.
Anthem, which is based in Los Angeles, withdrew their request because an audit found it was based on flawed data, said California Insurance Commissioner Steve Poizner.
On Wednesday, Anthem’s parent company, Wellpoint, announced a profit increase of 51% in the first quarter.
Anthem made their request earlier this year, in the midst of the health care debate, and the White House and congressional Democrats seized on the news to make the case for reform.
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