It is understandable that many were shocked by the movement of the carrier. But an opinion piece in the Wall Street Journal argued that there was an arguable justification for raising rates.
According to the op-ed, a bill in California actually caused these rate increases. The law in question was recently passed bill that does not allow insurance companies in the state to drop consumers who exhaust COBRA coverage. The law also puts a cap on what insurance companies can charge consumers post-COBRA.
Because of this law, the anthem WellPoint lost $ 58 million in 09. The author explained that the majority of consumers have exhausted COBRA benefits are at higher risk than other insured individual health plans. This means that the insurer was paying more in the costs of health care to receive bonuses.
In addition, the author writes, many people have also decided to drop their health insurance plans - possibly because of the delay in economics. This also leads to lower premiums coming in and more benefits being paid.
An independent actuarial firm found the rate increases and the need last fall, although the company was hired by the carrier. Steve Poizner, the Commissioner of Insurance of California, also examined the increases and did not object. (Although, now that he is running for governor, Poizner criticized the increases.)
Certainly there was an op-ed and not scientific. But it was an interesting perspective on the situation of health insurance in California.
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