Back in February, Anthem Blue Cross graciously agreed to put its 39 percent rate hike on hold until the California Insurance Commission could review its plan to make sure the increases were legal.
Guess what the regulators determined?
California insurance regulators cleared the way Wednesday for Anthem Blue Cross to implement scaled-back rate hikes after a previous increase was canceled amid an uproar over its size.
Anthem said it intends to put the new rates — averaging 14% and as high as 20% — into effect Oct. 1 for nearly 800,000 individual California policyholders.
Of course, the insurance company isn't happy that it had to wait six whole months to screw its customers.
On Wednesday, a Blue Shield spokesman said the company looked forward to moving ahead with its plan. "We wish the increases were smaller, but the cost of medical care for our members keeps rising dramatically," spokesman Tom Epstein said. "These increases are necessary to cover those costs."
Yes, these are necessary costs. Because the 68 percent rate hikes the previous year just weren't enough to help Anthem squeak by.
WellPoint (NYSE: WLP) the parent of Anthem Blue Cross and Blue Shield, reported 2009 net income of $4.7 billion, or $9.88 per share, compared to $2.5 billion, or $4.76 per share, in 2008.
State regulators say they have no authority to block the rate hikes because they are compliant with the law. But the California Insurance Department also wants policyholders to know just how much the delay in rate hikes benefited consumers.
The state Insurance Department said Wednesday the six-month delay saved policyholders $184 million, although Anthem, the state's largest for-profit insurer, put the figure at no more than $150 million.
"These savings were a clear benefit to Blue Cross' policyholders," said Deputy Insurance Commissioner Byron Tucker.
Wow. With all that savings, Californians will have money to burn -- on their increased insurance rates.