Health Insurance Rate Hike Will Go Forward, Says Anthem Blue Cross.

Wednesday, Feb 24, 2010  |  Updated 12:58 PM PDT
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Health Insurance Rate Hike Will Go Forward, Says Anthem Blue Cross.

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WOODLAND HILLS, CA - FEBRUARY 9: The Anthem Blue Cross headquarters is seen after the health insurer began informing its individual policyholders of rate hikes up to 39 percent to take effect at the beginning of March, on February 9, 2010 in Woodland Hills, California. Anthem Blue Cross, which has the highest number of individual customers in California, raised rates by as much as 68 percent in 2009. Health insurance companies in California can legally raise their rates at any time by as much and as they want. (Photo by David McNew/Getty Images)

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About 150 physical therapists and patients protested outside the offices of Anthem Blue Cross California today, while company executives faced lawmakers up in Sacramento, who grilled them about their planned rate hike for individual policy holders of up to 39 percent.   

Anthem is the largest health insurer in California. The proposed change would affect about 700,000 people. Anthem's remaining 7.3 million customers in California  are covered by employer-sponsored plans and would not be affected
 
Due to take effect on March 1, Anthem agreed to postpone the increase to May 1, and said it plans to go forward with the rate hikes. 
 
Kate Turbitt walked the picket line outside Anthem Blue Cross offices in Woodland Hills alongside the physical therapist she cannot afford anymore. Her health insurance rate increased 40 percent this year. She pays $1,200 per month and has a $10,000 deductible.
 
That’s $24,000 per  year.
 
“It’s a huge burden and it’s a stressful situation that you think about all the time,” Turbitt said.
 
Her 7-year-old daughter recently hurt her arm in a basketball game.
 
“She spent 3 days in the hospital, she had surgery, pins in her arm, and she’s a big athlete, and she needs her range of motion back… and all the therapists that we would like to see have had to drop their contracts with blue cross cause they’re reimbursing them at such a pitiful rate,” Turbitt said.
 
These physical therapists dropped their contracts because Blue Cross cut their reimbursement rates to those in the physical therapy provider network. 
 
According to physical therapist Brandon Dederich, it’s just not enough: “What they want to pay us is actually in a lot of cases less than what it costs to see a patient, to keep our lights on and pay our rent.” 
 
Meanwhile, in Sacramento, Anthem Blue Cross executives answered questions from state lawmakers, who wanted to know why they plan to hike rates for individual policy holders when their parent company, Wellpoint, posted record profits last year of $2.7 billion dollars.
 
Anthem Blue Cross President Leslie Margolin told lawmakers that its concern is to provide coverage to Californians, “ Profits in the range of 2.5 to 5 percent I think are reasonable profits, I think they are appropriate profits and I think they’re profits are a responsibility that we have to have to keep a viable business surviving and thriving.”
 
Margolin also said that the problem is a much bigger issue involving soaring medical costs and a broken system, especially with younger and healthier customers forgoing insurance during the recession, leaving older and sicker people to share the cost of individual coverage.
 
To Kate, it is incomprehensible as the bills stack up and she ponders how she will give her daughter the medical help that she needs.
 
“It’s just a nightmare, they’re getting wealthy and we can’t afford to treat our 7 year old.”
 
Anthem has agreed to the request from California Department of Insurance for additional time to review the rate increase. Here is their statement.
 
Tomorrow Angela F. Braly, WellPoint's chief executive, is scheduled to testify before the U.S. House Subcommittee on Oversight and Investigations .

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