Health insurer Anthem Blue Cross agrees to reduce the average increase to 14% from 18% in response to regulators’ criticism.

By Chad Terhune, Los Angeles Times
February 15, 2013

In response to pressure from California regulators, Anthem Blue Cross agreed to a slightly lower rate increase for about 630,000 individual policyholders that will save consumers an estimated $54 million.

Anthem, a unit of Indianapolis insurance giant WellPoint Inc., had sought to raise rates an average of 18% beginning Feb. 1. California Insurance Commissioner Dave Jones said Thursday that the company had agreed to reduce the average increase to 14% after regulators reviewed Anthem’s rate filing.

Some Anthem customers will still see their premiums rise as much as 25% under this agreement with the state.

“Health insurance premiums continue to increase substantially, and health insurance has become unaffordable for far too many Californians,” Jones said. “I appreciate that Anthem Blue Cross has agreed to lower these rates so policyholders will pay $54 million less than they otherwise would have.”

The state cited a number of factors that led it to deem Anthem’s proposed rate hike excessive, including unsubstantiated estimates of expected medical costs. Insurance officials review these rate filings, but they don’t have authority to reject them for being unreasonable as they do for property and auto policies.

To read entire story, click here.