Premiums may rise without reform

The headquarters of Blue Cross Blue Shield health insurer Anthem Inc. in Indianapolis, Ind.

TEXT OF STORY

Kai Ryssdal: California's biggest for-profit health insurance company has announced a big rate increase. Big, actually, might not even do it justice. Anthem Blue Cross has started telling individual policy holders -- that is, folks who buy directly from them, not through their employer -- that their premiums will jump by as much as 39 percent beginning March first. The company blames higher costs for hospitals, drugs and doctors. Also, the recession. Anthem says the bad economy is forcing younger, healthier premium payers to leave the insurance pool.

And Marketplace's John Dimsdale reports Anthem's heart-stopping rate increase has become part of the health care debate in Washington.


JOHN DIMSDALE: Health and Human Services Secretary Kathleen Sebelius shot off a letter asking Anthem to justify its increase. She noted Anthem's parent company, Wellpoint, earned $2.7 billion in the fourth quarter of last year.

Today, President Barack Obama used Anthem's hike to try to jumpstart health reform negotiations.

PRESIDENT OBAMA: If we don't act, this is just a preview of coming attractions. Premiums will continue to rise for folks with insurance, millions more will lose their coverage altogether, our deficits will continue to grow larger, and we have an obligation, both parties, to tackle this issue in a serious way.

In a written statement, Anthem said the recession and unemployment are pushing more healthy people to drop insurance leaving sicker people in the insured pool.

Robert Zirkelbach is with America's Health Insurance Plans, an industry trade association.

ROBERT ZIRKELBACH: Over the last year there has been an increase in uncompensated care as more and more people go without health insurance and aren't able to cover their bills if they go to the emergency room.

Health reform would prohibit insurance companies from rejecting customers with pre-existing conditions. But in exchange, the industry wants a mandate to make healthy people buy insurance, says Professor Marjorie Baldwin at Arizona State University.

MARJORIE BALDWIN: Otherwise premiums are going to go up too fast.

As hospitals and doctors seek reimbursement for uncovered health care from their patients who do have insurance.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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