Sebelius To Anthem: Justify 39% Rate Hike
California Department Of Insurance Also Investigating
POSTED: 10:31 am PST February 8, 2010
UPDATED: 11:15 am PST February 8, 2010
WASHINGTON -- The Obama administration on Monday asked California's largest for-profit health insurer to justify plans to hike customers' premiums by as much as 39 percent, a move that could affect some 800,000 customers.
In a letter to the president of Anthem Blue Cross, Health and Human Services Secretary Kathleen Sebelius said she was very disturbed to learn of the planned increases. She said they were hard to understand in light of the profitability of Anthem's parent company, WellPoint Inc.
"I believe Anthem Blue Cross has a responsibility to provide a detailed justification for these rate increases to the public," Sebelius wrote. She said the company should also make public what percentage of customers' premiums go to medical care versus administrative costs.
Peggy Hinz, a spokeswoman for Anthem, said she would check whether the letter had been received.
President Barack Obama cited the Anthem rate hikes in an interview with CBS' Katie Couric on Sunday as a reason to move forward with his health overhaul legislation, which is stalled in Congress.
"That's a portrait of the future if we don't do something now," Obama said. "It's gonna keep on beatin' down families, small businesses, large businesses. It's gonna be a huge drain on the economy."
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