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Anthem to testify for premium raises
Anthem Blue Cross headquarters in Woodland Hills, Calif.
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TEXT OF STORY
Steve Chiotakis: Executives from Wellpoint will testify this morning at a hearing on Capitol Hill. That's the parent company of Anthem Blue Cross, the health insurer that made news recently for trying to boost premiums by 39 percent on consumers in California. Marketplace's Jeremy Hobson reports.
Jeremy Hobson: Anthem says it needed to raise premiums on its California customers because healthy people are dropping out of the insurance pool due to the recession. But because of its move, Washington is hitting back twice as hard with proposals for new rules on insurance rate increases.
Dave Shove: I suspect that they wish they didn't have this headache.
Dave Shove is a senior health care services analyst at BMO Capital. He says Anthem's error was likely a side effect of its sheer size.
Shove: They insure 35 million people, they're the largest health insurer in the United States. Rate increases are done probably every day. And I doubt at the senior executive level that every rate increase is reviewed.
Well perhaps they will be from now on. Shove says Anthem's PR blunder isn't all bad for the company. The spat with Washington could boost the case for a mandate that all Americans carry insurance. And that is something Anthem wouldn't mind one bit.
In New York, I'm Jeremy Hobson for Marketplace.
About the author
Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead. Follow Jeremy on Twitter @jeremyhobson
Have you considered that this flap was created by Anthem just to push mandatory insurance? As they see any chance of "reform" evaporating, perhaps they want to get everybody angry and motivated? They will profit wildly from the proposed "reforms."
PS: Don't you think "health care reform" is a misnomer? It's really medical business reform. If it were really health care reform, it would be doctors, nurses, nutritionists, etc. talking about how to make people healthier to cut costs. Instead we're talking about reining in the for-profit medical biz: hospitals, big pharma, medical equipment companies, etc. whose business is profiting from sickness, not health.
Insurance is suppose to reduce risk for everyone. Now companies divide their customers into various categories to maximize profits.
This make some groups more vulnerable to profit motives of insuracne cmpanies.
If they combine all their customers together into ONE pool, they would have reduce the risk of rate increase for individual and small business groups.
Just pure greed on insurance companies.
This is why a public option is a no brainer. A public option is NOT free health care as some wing-nuts and teabagggers might want you to believe.
But then we now have a president who did a bait and switch on his promises of change and public option health care.
Politics as usual again.....
