Anthem to testify for premium raises
Anthem Blue Cross headquarters in Woodland Hills, Calif.
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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.