Anthem Blue Cross is making the case all by itself for healthcare reform.
California's largest for-profit health insurer violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, the state's insurance commissioner said Monday.
Anthem Blue Cross of Woodland Hills could face fines of up to $7 million stemming from the alleged violations from 2006 to 2009. Commissioner Steve Poizner said the insurer repeatedly failed to respond to state regulators in a "reasonable time" as they investigated complaints over the last year.
"We believe there is evidence to suggest there are serious issues with how Anthem Blue Cross pays claims," Poizner said at a Sacramento news conference. "Most disturbing to us is that they don't even respond" to the Department of Insurance "in a timely way."
But wait, that's not all. The company turned a very bright spotlight on rate increases when it emerged earlier this month that they would be raising rates by as much as 39% on some individual plan holders. Despite the investigations that have ensued from that at the federal and state level, despite the legislation it spurred that is being incorporated into the Obama plan, despite the outrage it created nationally, Anthem is going forward with those rate increases.
An executive for the parent company of Anthem Blue Cross told state officials Tuesday that California's largest health insurer will go forward with much-criticized individual-policy rate hikes of as much as 39% once a two-month delay lapses May 1.
James Oatman, vice president of WellPoint Inc.'s consumer division, told the state Assembly's health committee that the premium increases, and the profit they generate, are appropriate despite wide criticism from consumers, regulators, members of Congress and the Obama administration....
The rate increases, which had been scheduled to take effect March 1, have been delayed until May 1 while independent actuaries, hired by California's insurance commissioner, review whether they are justified.
How many other insurers in how many other states are getting away with this? In California, there's actually a very proactive insurance commissioner and pretty strict laws, yet Wellpoint/Anthem have violated those laws with basic impunity. One thing this case does--besides make the case for reform very strong going into the renewed push for reform--is to show the limits of regulation in reining in these insurers. The various measures currently in the hcr package will put more scrutiny on insurers, and try to force more transparency, but marketplace reform would be the most effective measure--give people somewhere else to take their health insurance dollars, preferably in a strong public option.