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Anthem Blue Cross's Announcement That It Will Temporarily Suspend a 39% Health Insurance Rate Increase Should Not Deter Immediate Legislative Action

LOS ANGELES, Feb. 13 /PRNewswire-USNewswire/ -- The following statement is being issued today by Consumer Watchdog -- Anthem Blue Cross's announcement today that it will temporarily suspend a premium increase of up to 39% or more should not deter the California Legislature from taking immediate action to regulate health insurance premium increases, said Consumer Watchdog.

Other California health insurers -- including Blue Shield of California and PacifiCare -- have already announced similar increases.  Existing law is inadequate to restrain health insurers from issuing excessive rate increases.

"Blue Cross customers know after years of double-digit rate increases that the company's voluntary withdrawal of the rate increase can't be trusted," said Jerry Flanagan, Health Care Policy Director for Consumer Watchdog.  "The legislature should step in immediately to require all California health insurers to get permission from the Insurance Commissioner before rates are increased."

Consumer Watchdog, which pioneered the most successful auto insurance premium regulation law in the nation, Prop 103, said that strong "prior approval" regulation, requiring full disclosure and regulatory assent before rate hikes go into effect, should be extended to health insurers. Such regulation has saved drivers in California $62 billion on auto insurance rates since 1988, and similar savings would be expected for health insurance rates. For more information about prior approval regulation, go to:

Assembly Member Dave Jones (D-Sacramento) has announced plans to introduce legislation to apply Prop 103-styled "prior approval" regulation to health insurance rates.

Anthem Blue Cross is the current focus of anger at insurers, drawing protests from the federal Department of Health and Human Services, from President Obama himself and the state Insurance Commissioner. But it is not an isolated incident. Small businesses nationwide received notice of 15% to 20% premium increases last fall from multiple insurers, and this year's jump in individual Blue Cross policies follows outsized increases last year. At the same time, the parent company of Anthem Blue Cross lost nearly 4% of its customers in 2009, while posting profits significantly above 2008 levels.

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

SOURCE Consumer Watchdog



SOURCE Consumer Watchdog
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