Anthem Plans Rate Hikes Up To 20% for Nearly 600,000 Californians

Posted on 27 March 2012

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By Carmen Balber
Consumer Watchdog

Anthem Blue Cross will raise health insurance rates for nearly 600,000 Californians by as much as 20% on May 1. A ballot initiative to make health insurance more affordable by regulating premium increases is necessary to protect Californians from excessive rate hikes.

Friday was the 2nd anniversary of the federal health reform law, which will require every American to have health insurance by 2014 but does not control what private health insurance companies can charge. The ballot initiative proposed by Consumer Watchdog Campaign would require health insurance companies to publicly justify rates, under penalty of perjury, and get rate increases approved before they take effect.

Every time insurance companies force another double-digit rate increase on consumers they make the case for our ballot initiative to rein in excessive rate hikes. If Anthem had to include a copy of our petition in the rate increase notice it mailed to more than half a million consumers, we'd already have the 505,000 signatures necessary to qualify the measure for the November ballot.

The ballot measure would regulate health insurance policies that cover 5.3 million Californians. 35 states have the power to reject excessive rate increases, but California does not.

The Affordable Care Act ends some of health insurers' worst abuses - like cancelling coverage when patients get sick, or charging women more just for being women. But the law falls short on cost control. Health reform cannot succeed if we don't put the brakes on skyrocketing insurance premiums. Strong rate regulation will lower premiums, give insurers incentives to cut spending and save health reform.r.

On Monday, the U.S. Supreme Court began hearing oral arguments in a case that will determine whether the law's mandate that individuals purchase insurance violates the Constitution. Regardless of what the court decides, the experience with health reform in Massachusetts shows that consumers will need the protection of rate regulation to hold down insurance prices.

Consumer Watchdog released a report last year demonstrating how rate regulation has begun to curb insurance premiums in Massachusetts, where the mandate that people buy health insurance -- the model for the 2010 federal reform law -- failed to control costs. Other states that instituted or strengthened state laws requiring rate review and approval of health insurance rates, including New York, Oregon and Maine, have also seen cost-control results. States without regulation of health insurance rates have seen massive and unjustified rate increases take effect with no power to stop them.

A new report from the California HealthCare Foundation finds that 38% of Californians say the cost of their health insurance went up in 2011, and 37% delayed getting health care they needed because of costs.

The reality is that consumers will not purchase insurance they cannot afford, and insurance prices become more out of reach for families every year. Experience in states from California to New York has shown that rate regulation is the only way to force insurance companies to open their books, justify spending, and block excessive profits.

The Centers for Disease Control and Prevention reported last week that 1 in 5 Americans are burdened by medical debt and half of them are unable to pay the debt at all. Health insurance premiums in California increased at a pace five times the rate of inflation in the last decade, according to the California HealthCare Foundation.

Download the Consumer Watchdog Report, "Health Reform and Insurance Regulation: Can't Have One Without The Other".

Read more about the initiative at


Carmen Balber is a Consumer Advocate with Consumer Watchdog, a nationally recognized consumer group that has been fighting corrupt corporations and crooked politicians since 1985. This article originally ran on Calitics.

Hey, did you think making it illegal to exclude the high risk and keeping kids on the insurance till 26 would be free? I am not really attacking these, just saying it wasn't for free and one could reasonably expect your insurance rates to go up. No such thing as a free lunch.

Maybe they didn't because there's no evidence that it will DO ANYTHING but help, and lower costs having people without coverage ends up costing people with it more in the long run. And why wouldn't we want more people covered by their own family's policies? Especially when its that demographic that is particularly finding it hard to afford such coverage, as they are having an incredibly difficult time finding work in this economy while simultaneously being saddled with record student debt.

But yeah, "good point"...let's kick more indebted and unemployed young people off their new health coverage so we can spend more and have less healthy people living in fear of sickness or injury induced bankruptcy. Man...why do you people come to this site???? You know nothing and embarrass yourselves...over and over again.

This article simply proves that we must stop enriching insurance companies by giving them millions of new customers--what Obamacare does. Dump the health insurance companies and have a single-payer health system. Of course, the Democrats and Republicans collect billions from insurance companies for their campaigns.

Absolutely single payer is the answer. And the Republican idea stolen by Obama to mandate everyone purchase health insurance is not a fair or effective way to achieve anything close to universal coverage. Of course, until we can get single payer (and we couldn't even get a public option), there are many things in the plan that must be kept and expanded in some cases, from more funding for community health clinics to expanding Medicaid to ending discrimination against the sick (preexisting conditions) to putting an end to insurance companies dropping customers when they get sick and the list goes on.

But absolutely...the Republican individual mandate that was pitifully adopted by Democrats in hopes of getting GOP votes (which of course was never going to fact, they now call their own idea "socialism" and "unconstitutional") was a bad move.

Nonetheless, being that we do have an individual mandate and no single payer (sadly single payer in CA was barely defeated in the State Senate a few weeks ago)...nor any signs we will soon...we absolutely need veto power over health insurance industry price gouging...which AB 52 (Feuer) would provide, and if it can't pass the insurance industry bought State Senate, then we voters can demand it ourselves this coming election. Consumer Watchdog deserves serious props for giving us this opportunity.

Moron. Single payer will do nothing. It will result in exactly what the public education system has become - a race to the bottom with no competition to drive the schools to do better. In affluent areas, the public schools do well because of parent involvement and parent contributions.

You can beat simple economics... if you increase demand for a product (Obamacare) and you don't increase supply of the service, prices will rise. There's nothing more expected than that. If you want to make medical care cheaper and available for all, you will have less kids go into the medical field. Why bother going into the medical field if you will end up with lots of student debt and crappy income to boot. I'm sure you have an answer for this... too bad it doesn't make long term economic sense.

July 1, more mandated benefits kick in. You get maternity on your plan weather you want it or not. I know I have to have it now and I'm a male.