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Anthem Blue Cross Hikes Rates By A Third In California

One of California’s biggest health insurance carriers, Anthem Blue Cross, will increase¬† its individual health insurance premiums by nearly 40 percent starting next month.

The announcement came within hours of the Obama Administration’s call for Congressional Republicans and members of his own party to meet at the White House for a televised summit on moving forward with health care reform. President Obama appeared to use the announcement as political proof that health care reform is “essential,” while his Secretary of Health and Human Services denounced the insurance carrier in a statement later in the say.

“As we continue the health insurance reform debate in Washington, this announcement reminds us that too many Americans can be left with unaffordable insurance each time the rates of rules change in the private market,” said Sebelius. “It’s clear that we need health insurance reform that will give American families the secure, affordable coverage they need.”

Meanwhile back in Anthem’s home state, California Insurance Commissioner Steve Poizner publicly scathed the company and urged individuals looking for affordable health insurance plans to compare rates with other carriers. Poizner said he was “Alarmed” by the larger-than-expected rate increase and said his department would examine Anthem’s actions in the coming days.

Health insurance is regulated in the individual states where they are sold. In Calfornia, state law requires that health insurance companies spend at least 70 percent of every dollar earned from their premiums on medical care. Poizner said he has hired an outside actuary to review Anthem’s increase “to ensure they are complying with this state law. If we find that their rates are excessive, I will use the full power of my office to being these rates down.”

Complicating Anthem’s justification for the increase, its parent company, Wellpoint Inc. announced it had earned $2.7 billion during the previous business quarter. Neither Anthem nor Wellpoint made a public statement to the news media about its rate plan at the time this story was published.

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